The Role of Emotional Intelligence in Forex

Emotional Intelligence refers to how a person can perceive and manage his or her own feelings and feelings. This term is associated with two researchers Peter Salvoi and John Mayer, and more popular by Daniel Golmanvi in ​​1996. Emotional intelligence corresponds to the realm of cognitive ability that facilitates the handling of personal relationships and promotes self-awareness, social awareness and empathy. On the practical side, The Infinity APP Review means that emotional intelligence has a significant impact (positive and negative) on a person’s behavior. The following article discusses how emotional intelligence affects Forex trader performance.

Skills that form emotional intelligence

As noted in the introduction, emotional intelligence consists of four main skills: self-awareness, self-management, social awareness, and relationship management.

While self-awareness and self-management reflect the individual’s personal competence, social awareness and relationship management reflect the social competence of the individual. Self-awareness and social awareness can fall under the heading of “what a person sees, whereas self-management and relationship management fall into” what a person does. Thus, it is clearly and comprehensively understood that all four skills intertwine and overlap in a complex manner. Now let’s take a quick look at those skills before discussing their impact on Forex traders in particular.

Self-awareness – the person’s ability to understand his own personality, his feelings, as well as his desires and motivations. A self-conscious person will know the change in feelings when changes occur.
Self-management can be defined as the ability to use self-awareness to be flexible and to make positive changes in behavior.
Social awareness – the ability to understand others’ feelings, and generally understand what is going on around us.
Relationship management enables the individual to use self-awareness and then interact successfully by understanding the emotions of others.

Mind and social intelligence

Emotional response to the event arises in the limbic system. The primary senses enter the brain through the spinal cord. However, before reaching the special part of the brain that makes rational decisions, the signals enter the limbic system. Thus, there must be adequate balance between mental and emotional centers in the brain. Then the individual can have the ability to act and act without any dilemma. In other words, the level of emotional intelligence is determined by the extent of effective communication between the rational and emotional parts of the brain.

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Basic skills based on emotional intelligence

An individual’s emotional intelligence can concentrate energy in a particular action, ultimately leading to an amazing result. It is clear that emotional intelligence sets the foundation for a large number of skills, which will determine the performance of a person in any profession, including foreign exchange trading and investments. The skill set that is nurtured by emotional intelligence and its impact on Forex trader performance is as follows:

Anger management

Research has shown that a person who lacks emotional intelligence will not be able to control his fits of anger. Ultimately, a person will be forced to make the wrong decisions. In the absence of a rationale, anger prevails. An angry forex trader is susceptible to frustration and hasty business decisions. Hasty decisions will result in a loss. And it will not end there. A forex trader who likes anger may try to take revenge from the market, leading to more losses. Finally, his account will be blown away. A Forex trader with emotional intelligence will recognize and identify the fault rather than be seized and controlled by tantrums.

Carry stress

When the volume of volatility within the market increases, the forex trader who maintains a trading position will inevitably be exposed to a certain level of tension and will be determined by the size of the open deal and the leverage used. Under these circumstances, The Infinity APP Review emotional intelligence, which would ensure the Forex trader to remain undisturbed or tense by the increase in price volatility. Studies have shown that the level of emotional intelligence plays an important role in determining a person’s ability to manage stress. Thus, a forex trader with a good deal of emotional intelligence waits for either pre-set profits or a stop loss level and avoids adjusting trading orders. On the other hand, a trader who has little emotional intelligence will be susceptible to stress and then make the wrong decisions, which will ultimately lead to loss.

time management

Time management is one of the important words in the life of a Forex trader, and the emotional intelligence of the human can achieve this goal. Forex traders must set aside the time to prepare for the next trading day. This includes setting up market analysis, identifying entry and exit points, and keeping trading notes. Through emotional intelligence, the trader can set his priorities and needs so that none of the trading activities will be missed due to lack of time.


Flexibility is another necessity that a forex trader must have. Studies have shown that emotional intelligence affects a person’s resilience in an amazing way. A hard trader will find it difficult to accept errors, especially if the market does not move as expected, while the trader will close the trading center and wait for clarity. On the other hand, a trader who lacks flexibility can incur losses that could threaten the whole account. While professional traders are always flexible. They know from their experience the fact that the market has neither a ceiling nor a bottom.

the responsibility

A forex trader should be responsible for his actions. Response can be either positive or negative. However, the trader should not be ashamed of being held accountable. The Infinity APP Review is the focus of the driving process in everything. Blaming the market or the trading medium is a hump and a common habit that is sung by some traders. While we can not deny the fact that some unlicensed brokerage firms loot customers’ money in various ways, this does not deny that most trading brokers are ethical. Thus, the trader must meditate and analyze errors instead of trying to blame the external aspects. Emotional intelligence makes a person accountable and takes responsibility for his actions, and any trader needs to be identified as such.

social skills

The skills of interaction and communication must be available for success in any profession and foreign exchange trading is not an exception to this rule. The trader should not hesitate to communicate with the trading broker in case of any doubt about the price difference, the high price of the doubtful, the payment / deposit issues, as well as the problems related to the trading platform and barter rates imposed, and what he may wish to communicate. Frequent communication leads to problems. If a person is new to currency trading, he should not have any concerns in raising doubts or exchanging ideas with experienced specialists through forums and social media platforms. Perhaps emotional intelligence helps the trader to express his opinion without any restrictions and eloquently.

Ability to make decision

As we discussed earlier, the primary senses enter the limbic system before it reaches the brain segment that makes decisions rational. Thus, any decision taken by a person is the result of the cumulative effect of the rational and emotional center of the brain. If the emotional center does not perform well, the brain response is not enough to solve the issues. Studies have shown that emotional intelligence affects a person’s ability to make a decision. Perhaps the decision-making power ultimately determines the profit and loss factor of a forex trader. A trader with good emotional intelligence is capable of making intelligent decisions in a timely manner.

Trust and self-confidence

Self-esteem is yet to be found at high levels in people with high levels of emotional intelligence. Emotional Intelligence A person can trust his or her abilities. A Forex trader with no confidence will hesitate to place orders or sell even if the deal is perfect. After placing a trading order, the trader does not wait patiently for price action to start as he wants. In the end, the trader is going out early and losing a chance to make good profits. On the other hand, the seasoned trader adjusts the position of profit-taking and reduces losses quickly. The maturity and confidence shown by a professional trader is only a product of emotional intelligence.


Insisting is yet another must-have feature in a Forex trader. A Forex trader should be able to justify his actions in a soft way, if necessary, as compared to any other market participants. It should not be too aggressive or too negative in its responses. Where an aggressive mentality creates a bad impression of a trader, while a lot of slackness and negativity makes others look to the trader as helpless. According to studies, emotional intelligence is primarily responsible for the firmness of people.


Sympathy shows a person’s ability to understand the feelings of others. In the case of foreign exchange trading, empathy also corresponds to the trader’s ability to assess the response of other market participants to a particular event or economic data. Unless the trader is able to have the expected reaction metrics from the majority of market participants, it will be difficult to take an appropriate trading position in the market. This may end up costly mistakes. Emotional intelligence feeds the trader’s ability to understand market concepts and guide him to make decisions in line with the fundamental direction of the financial asset.

Improve emotional intelligence

Not everyone is born with a high level of emotional intelligence. However, the good news is that neuronal flexibility or the ability of the brain to adapt to internal or external changes can be used to increase and elevate an individual’s emotional intelligence. All nerve cells that connect the path between the rational and emotional centers of the brain can branch up to 15,000 joints when trained properly. This wonderful gift that everyone possesses can be used to improve his emotional intelligence. Based on this theory, we can say that a forex trader who cultivates discipline in trading will be able to see a marked rise in emotional intelligence very soon. When the level of emotional intelligence rises, all the skills mentioned above will be sharpened and refined, leading to better performance over a period of time.

Emotional Intelligence plays a key role in Forex trader performance. The most important point is to remember that humans have innate ability to increase their level of emotional intelligence. A little effort falls on the individual to go a long way in nurturing the level of emotional intelligence. The level of emotional intelligence is soon reflected in commercial performance.