Trading Basics: Trading Psychology
It is important to manage emotions so that they do not influence traders and traders rather follow strategy. These are common emotion that can influence trading:
- Boredom may result in overtrading. Traders risk in trades that are less probable to win.
- Anger leads to revenge trading. Traders enter risky positions to take revenge on their failed trades.
- Fear, uncertainty, and doubt (FUD) can influence traders to sell bottoms.
- Greed or fear of missing out (FOMO) can influence traders to buy tops.