Psychology of trading: What is the role of emotions?

Psychology of trading | Forex tips

 Professional psychologists and psychiatrists who decided to engage in trading are more likely to be luckier than economists. This article will reveal to you the secret of their success. Whatever your trading guru said, the emotional component of the trader at the time of the transaction is half (or even all of the 90% according to Lewis J. Borselino) among all the factors that influence the outcome.

 

Very little - to be a theoretical expert, to understand every little thing and know all sorts of strategies on the teeth. Obligatory for the trader are studying the psychology of the trader's actions, the psychology of the stock crowd and the psychological characteristics of stock exchange sensations. Self-control and the ability to keep oneself in hand help the trader not to be distracted by unnecessary emotions, but consistently perform actions that should lead to a positive result.

 

Psychology of personality - this is one of the main driving factors in the Forex market and other currency markets. Traders are constantly under the influence of stress - they are afraid, then they decide to risk and ... fall. Despair, a new attempt, again fear and .... the instinct of self-preservation, but, unfortunately, at the most inappropriate moment for it, was heard. Greed - it moves any trader, it is she who is the culprit for making any deals.

 

The trader is extremely prone to excitement - emotions obscure the mind and force him to make deals with the highest level of risk. It is necessary to keep excitement in a bridle and not to allow it to pass frames of the reasonable. When a trader is overcome with fear, it is better to pause and rest. Fear is a terrible force playing against you. The trader is filled with hope - this emotion is also very strong and often gives the trader pink glasses that do not miss the rays of reasonableness and sober analysis of the situation. We also need to understand that the change in the exchange rate does not always depend only on the fundamental data of the state economy, but also on the psychological factor. This is described in sufficient detail by Lewis J. Borselino and Brett N. Steenberger. Recommended for reading.

 

Losses due to a psychological factor must disappear from your life. Study this question carefully, and see how much the percentage of your income will change.

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