In psychological writing (and writing in many other disciplines), the reader assumes you are using your own words and sentence structures. Thus, even when discussing someone else's ideas, the reader still assumes that you wrote your own unique sentences (even if you include citations). Doing otherwise, then, is implicitly trying to take credit for someone else's work.
Also in psychological writing, you are typically explaining or defending a point by using evidence gathered by other authors - often multiple authors. Because the ultimate point you want to make is not dependent on the particular wordings those other authors used, the entire paper you write needs to be in your own words - even in those places where you are discussing someone else's research.
Paraphrasing or using more than a few direction quotations interferes with the "flow" of your own writing. It is often difficult for the reader to see how those other, paraphrased or quoted, ideas fit with your broader discussion because they have not read the same source material you have.
Thus, in psychological writing, paraphrasing is considered bad writing practice. If you reach a point where you feel the particular wording another author used is important to your point - that is one of the rare places where you should use a direct quotation (and, as with all information that you learn from another source, include a citation).
Avoid the (common) tendency to paraphrase by closing all books and sources before beginning to write your paper (or a section of it). If you need to refer back to a source to get a detail, or double-check that you are accurately using the information, do so via revision after writing about the source using your own words.
USEFUL EXAMPLE courtesy of Professor Paul C. Smith
Paraphrasing, in the sense that most people do it, is, essentially, plagiarism. When you use information from a source, the goal is to put it entirely in your own words, in the larger context of YOUR paper. Most direct paraphrasing (that is, substituting, deleting or re-arranging words from the original work) is obvious to the readers of a paper because it does not fit with the overall flow of YOUR work. Below is an example of what constitutes inappropriate paraphrasing versus appropriate use of a source.
Here is an example paragraph from a source:
"Long-term memory, that immensely complex storehouse, has also been most extensively studied with the use of verbal materials, usually presented in the form of long lists. As we shall see, this approach has resulted in some extremely important findings, but it has also been a bit misleading. After all, remembering lists of words is somewhat different from remembering a conversation, a recipe, or the plot of a movie" (Klatsky, 1975, p.17).
Here is an inappropriate paraphrase:
Long term memory is a complex storehouse that has been studied extensively using verbal materials presented in the form of long lists. While this approach has resulted in some important findings, it has been misleading. Remembering a list is not like remembering a discussion or a movie (Klatsky, 1975).
Here is an appropriate summary of that information to be included in a paper:
Researchers usually study long term memory by having subjects attempt to recall aloud items from long lists. Because such a task is different in important ways from the kinds of tasks long term memory is usually called upon to perform, our findings are somewhat questionable (Klatsky, 1975).
You should first notice that in both of the above example paragraphs, the reference was provided (Klatsky, 1975). This work is still the source of the ideas, even if not directly quoted. (Ask your professor and/or visit this website for more information about in text citations: Finding, Reading and Citing Psychology Sources.) The inappropriate paraphrase is not really the student's own words, but rather just Klatsky's words rearranged a bit (with a few words omitted). If you were to turn in a paper containing this paragraph your professor would have been forced to level a penalty (probably a fairly harsh penalty). It should be apparent that a person could write such a paragraph without really understanding the original paragraph at all. The author of the appropriate summary, on the other hand, must have understood Klatsky's original paragraph. The meaning of that paragraph is captured in the summary, but the words used to express that meaning are the author's own. An appropriate summary indicates to the reader that the author understood the original material. Authors should not include material that they do not understand. Rosnow and Rosnow (1992) refer to the inclusion of material the author does not understand as "lazy writing" (p.49).