Find The Best Stocks With Perfect Trade Setups In Minutes A Day

Stop wasting time looking for the right stocks.  Free training on how to find perfect stock trades that can move 300-1,500%.  Learn the # 1 key to successful stock investing and how to find success even If the market is crashing, rebounding… or just going sideways.

Do Not Delay - Click Here Now

 

4 Things That Get Traders in Big Trouble

The stock market may not have emotions, but traders most definitely do. This is part of what makes trading such a rollercoaster — you feel those intense highs and terrible lows.


If you're a stock investor who wants to retire early, check out this free training and learn how!  Click Here


You’ll never be able to totally remove human emotions from trading. However, gaining an understanding of the psychology of trading can help you remain calculated and level-headed when the heat is on during a trade. 

The Emotions of Trading

When it comes to emotions in trading, the big four that tend to get traders into trouble are greed, fear, hope, and regret. Let’s take a look at each of them: 

Greed

This isn’t the movie “Wall Street,” and you’re not Gordon Gekko. Greed is not a good thing for traders. Here’s what it can make you do: 

Set unrealistic price targets

Greed can make you set unrealistic price targets based not on reality but on what you wish you could make from a trade. This is a real problem, because while you’re dwelling on how much more you could make if you stay in a trade, you could be missing out your chance to either cut losses or maximize profits. With this mentality, you’re not looking at the trade clearly, and are more likely to make bad decisions that cost you money.

Ignore the rules

Greed can make you do dumb things like ignore intelligent risk-management practices. When you’re in a greedy mindset, you can get so blinded by the idea of what you could make that you take risks and gamble. Unfortunately, this attitude can get you in a lot of trouble.

Fear

While caution is good in trading, fear can mess with your mind. A fear-motivated trader is more likely to do the following: 

Give in to panic

When your trading decisions are rooted in fear, you’re more likely to do things like sell in a panic, regardless of the price.  The inability to weather normal market events like pullbacks and to step back and determine whether or not entry and exit points are intelligent can keep you from executing successful trades.

Avoid risk entirely

As a trader, you want to do all that you can to mitigate risk. But it’s a simple fact: The stock market is volatile, and it’s impossible to trade without assuming some level of risk. If you’re completely risk-averse, you could find yourself suffering from the “paralysis of analysis” — where you’re so caught up in reviewing the technicals that you become too scared to actually execute trades in a timely fashion. You may also find yourself avoiding quality setups because you’ve been burned before. 

Fall into the FOMO trap

On the flip side of being risk avoidant, fear can also inspire rash behavior like chasing stocks, simply because you’re scared of missing out on the action. Unfortunately, chasing stocks is rarely a good strategy. It makes you ignore rules and risk management practices. But more importantly, if you’re chasing, you’re already behind the curve. Personally, I like to be ahead of the curve when I pursue trades. 

Hope

Generally, hope is viewed as a good thing. However, as a trader, it can lull you into a deluded sense of security that things will work out in a trade — even if the stock’s price action tells a different story.  This so-called “hold and hope” mentality can make you do things like this: 

Wait for the stock to turn around

It’s humbling to admit that a stock isn’t performing as you’d hoped. A false sense of hope can lead you to believe that things will improve if you just hold on to the stock a little longer — even if there’s zero evidence or data pointing toward that happening. Instead of doing the responsible thing and cutting your losses, you hold on in vain. In situations like this, often enough the price will continue to plummet, compounding your losses. 

Wait for a catalyst that may never come

Traders with a false sense of hope might also trick themselves into believing that there’s a huge catalyst just around the corner that will save the day (and the stock price).  In this situation, you might hold out hope that a company that has consistently reported disappointing earnings will suddenly report huge profits.  News flash: This is trading, not a movie with a guaranteed happy ending. To expect that things will turn around with no hard data is magical thinking, not logical thinking. Hope is not a strategy!

Regret

Regret can paralyze your thinking, life, and overall well being! It’s a beast of an emotion in trading. Here are some common reasons why traders feel regret: 

Missing a trade. 

Every trader will feel regret about the trade that got away at some point. However, it’s important to remember this: There will always be another trade. There will always be another chance. By wasting your time obsessing about the one that got away, you may, in fact, be missing out on current and future opportunities.

Not taking profits

Did you wait too long and miss out on maximum profits? Or, did your trade slide from green to red? Hey, you’re not alone. This happens to every trader from time to time. Instead of kicking yourself about it, take the time to evaluate where you went wrong — at what point should you have taken profits? Learn from this experience, and resolve to do differently next time. 

Losing money

To the best of my knowledge, no trader has ever jumped for joy at a big loss. However, it’s part of the game.  If you’re so traumatized by loss that you can’t move forward, it’s going to be a problem. Instead of dwelling, take the time to consider if you could have done anything differently. If you learn from the experience, then there’s value in the loss.

Mastering Your Emotions as a Trader

So … how can you master your emotions as a trader? Well, there’s good and bad news. The bad news is that you’ll never be able to 100 percent master your emotions — you’re human, after all.  But there’s good news, too: It’s easier than you might think to keep your emotions in check. Here are my top tips for controlling your emotions in trading. These tips might seem simple, but just try putting them into practice. They’ve been very helpful for me, and hopefully will be for you, too.

Challenge your thinking. Keep learning, observing, and questioning what you do in trades. It will help you continue to improve.

Have an accountability partner. Get yourself a trading buddy … and keep each other accountable. It’s incredible how much this can improve your trading.

Stick to your plan. Make, and commit to, your trading plan. Easier said than done, but it will help you see more consistent results.

Be disciplined. None of the above tips will work without practice and dedication. So resolve to be disciplined and stick with trading responsibly! 

By the way, if you liked this article, you'll LOVE this Meaty free training I just published on the top 3 questions and challenges every investor faces AND how to overcome them. It's titled "10k into $2.4 Million in 18 months" and you can grab it for free here

There are risks inherent in all investments, which may make such investments unsuitable for certain persons. These include, for example, economic, political, currency exchange, rate fluctuations, and limited availability of information on international securities. You may lose all of your money trading and investing. Do NOT enter any trade without fully understanding the worst-case scenarios of that trade. And do NOT trade with money you cannot afford to lose. Past performance of an investment is not necessarily indicative of its future results. No assurance can be given that any implied recommendation will be profitable or will not be subject to losses. Information provided by the Company is not investment advice. The Company is not a registered investment adviser, stock broker, or brokerage. You agree that the Company does not represent, warrant, or take responsibility that any account will or is likely to achieve profit or losses similar to those shown. Examples published by the Company are selected for illustrative purposes only. They are not typical and do not represent the typical results of all stocks within the Companys software or its individual scans and searches. No independent party has audited any hypothetical performance contained at this Web site, nor has any independent party undertaken to confirm that they reflect the trading method under the assumptions or conditions specified.

FREE TRADING WEBINAR - TRADERSPRO PRESENTS: Starting With Only $10,000 Retire With $2.4 Million? Click Here Now

Join Us Now
X