Anger, Fear, Greed and stock trading

Anger, Fear, Greed and stock trading tradersync

In 2012, the University of Bologna in Italy conducted a study on how emotions affect stock trading.[1]

The study showed that there was a definite correlation between anger, anxiety and how even experienced traders behave. Traders tend to invest more and more rapidly when they get angry, and less and more slowly when they become afraid.

Anger Management

It’s an almost classic trading pattern. You lose on a trade, then on another, then on another. Now you’re angry: What’s with the market today! So you jump in again fast, and now you hold the trade too long, and it goes sour. Now you’re really mad, and you keep on making hasty decisions.

This is where your trading journal should be of great help. A good trader keeps a thorough journal, and as the anger builds up inside you, you call up your journaling software and review similar trades to the one you’re about to make, spurred by anger. You see that the trading setup doesn’t really follow the logic of your strategy. And you don’t lose money on the bad trade – instead you wait to make a good one.

We all get angry. No matter how patient or calm we are, there are times when we just lose it. For a trader, these are the dangerous times, and that is where the trading journal can make a vast difference for you.

Anxiety Control

The effect of anxiety, on the other hand, on your trading can be just as destructive as anger.

You’ve had a short winning streak. But it’s not quite clear what’s driving it. Your trades are working, but it’s difficult to choose an exit point, because your analysis isn’t close enough to the market.

You want to keep making winning trades, but, with each new trade, it becomes harder and harder to pull the trigger to start or to press the stop button. The lack of logic is making you nervous, anxious, and, filled with anxiety, you can’t keep making decisions. Finally you pull the plug on a trade that you see would have gone a lot farther if you had had the strength to wait.

This is how anxiety builds, and wrecks your trading. The one sure way to fall into this trap is to trade more money than you can afford. Trading requires detachment, and you can’t stay detached if there’s too much risk riding on each trade. But, at times, every trader suffers from anxiety, as stock trading involves risk, and the market does not behave according to any man’s plan.

Again, the trading journal is the solution. As your anxiety builds, you call up your high quality journaling software and you look back at both the good decisions you made, and the bad ones in which you let anxiety stop you too soon. You compare these trades with the market, and you determine a new strategy that fits the current conditions better. Once again, the trading journal is your friend, because it enables you to escape from emotion, and find the trend.

The Greed Trap

Greed is the other destructive emotion that can ruin a trader. Greed is a kind of lust for money – you want more, more, more…

So you keep winning trades alive even after they have reached a logical exit point, because you want to squeeze every last penny out of them. It’s a recipe for disaster; sooner or later, the trade goes wrong, and you lose all the potential gains you could have received from it.

The trading journal is a sure-fire antidote to greed. When you feel that lust for lucre coming on, you call up your high-quality trading software, and remind yourself of all the times you’ve made the same mistake. And you end the trade in time.

Count on your trading journal to keep you safe from the effects of anger, anxiety and greed. You’ll be a much better trader as a result.


32 responses to “Anger, Fear, Greed and stock trading”

  1. I used to be suggested this website by way of my cousin. I’m now not certain whether this put up is written by way of him as no one else recognize such particular about my difficulty. You’re amazing! Thank you!|

  2. Hello there, I found your website by way of Google while searching for a comparable topic, your site got here up, it appears to be like great. I have bookmarked it in my google bookmarks.

  3. It’s hard to find well-informed people for this topic, but you seem like you know what you’re talking about! Thanks|

  4. hello!,I love your writing very so much! percentage we be in contact more about your article on AOL? I need a specialist in this area to solve my problem. Maybe that’s you! Having a look forward to look you. |

  5. I really like what you guys are usually up too. Such clever work and exposure! Keep up the fantastic works guys I’ve you guys to our blogroll.|

  6. What i do not realize is if truth be told how you’re not actually a lot more smartly-preferred than you might be right now. You’re so intelligent. You already know therefore considerably relating to this topic, produced me in my opinion imagine it from a lot of various angles. Its like men and women are not involved unless it is one thing to do with Girl gaga! Your own stuffs excellent. Always handle it up!|

  7. Someone necessarily assist to make significantly articles I’d state. This is the very first time I frequented your web page and so far? I amazed with the analysis you made to make this particular publish amazing. Magnificent job!|

  8. Lucien Zeran says:

    I’ve been browsing online more than 4 hours today, yet I never found any interesting article like yours. It is pretty worth enough for me. In my opinion, if all web owners and bloggers made good content as you did, the internet will be much more useful than ever before.|

  9. Hugh Zysett says:

    After I initially left a comment I appear to have clicked the -Notify me when new comments are added- checkbox and now every time a comment is added I get 4 emails with the exact same comment. There has to be an easy method you are able to remove me from that service? Cheers!|

  10. Lisbeth List says:

    It is not my first time to go to see this web site, i am visiting this site dailly and take good facts from here everyday.|

  11. I’m curious to find out what blog platform you’re using? I’m experiencing some minor security issues with my latest blog and I’d like to find something more secure. Do you have any solutions?|

  12. Carlo Donnel says:

    Wow, this paragraph is fastidious, my sister is analyzing these things, so I am going to inform her.|

  13. Hi, after reading this amazing post i am too happy to share my know-how here with colleagues.|

  14. you are really a excellent webmaster. The web site loading pace is amazing. It seems that you’re doing any distinctive trick. In addition, The contents are masterwork. you have done a fantastic task on this subject!|

  15. I have been exploring for a little bit for any high-quality articles or blog posts in this sort of house . Exploring in Yahoo I finally stumbled upon this site. Studying this info So i’m satisfied to show that I have a very excellent uncanny feeling I found out just what I needed. I most undoubtedly will make certain to do not fail to remember this website and give it a glance regularly.|

  16. Link exchange is nothing else but it is simply placing the other person’s webpage link on your page at suitable place and other person will also do same for you.|

  17. It’s very straightforward to find out any matter on web as compared to books, as I found this paragraph at this site.|

  18. I am regular visitor, how are you everybody? This article posted at this web page is actually pleasant.|

  19. Diego Fera says:

    I do not even know the way I finished up right here, however I thought this publish was good. I do not realize who you’re but definitely you’re going to a well-known blogger for those who are not already. Cheers!|

  20. Howdy great blog! Does running a blog like this take a lot of work? I’ve no expertise in computer programming however I had been hoping to start my own blog soon. Anyway, should you have any suggestions or tips for new blog owners please share. I know this is off subject nevertheless I just wanted to ask. Many thanks!|

  21. I’m gone to tell my little brother, that he should also visit this web site on regular basis to take updated from hottest news update.|

  22. Hiya! I know this is kinda off topic but I’d figured I’d ask. Would you be interested in trading links or maybe guest writing a blog post or vice-versa? My blog goes over a lot of the same topics as yours and I think we could greatly benefit from each other. If you are interested feel free to shoot me an e-mail. I look forward to hearing from you! Wonderful blog by the way!|

  23. What’s up to every one, it’s in fact a pleasant for me to pay a visit this site, it contains helpful Information.|

  24. Definitely believe that which you stated. Your favorite reason seemed to be on the internet the easiest thing to be aware of. I say to you, I definitely get irked while people think about worries that they just don’t know about. You managed to hit the nail upon the top and defined out the whole thing without having side-effects , people can take a signal. Will likely be back to get more. Thanks|

  25. Every weekend i used to visit this web page, as i wish for enjoyment, for the reason that this this web site conations in fact fastidious funny material too.|

  26. Undeniably imagine that which you said. Your favourite reason seemed to be on the net the easiest thing to take into account of. I say to you, I definitely get irked even as folks think about issues that they plainly don’t recognize about. You managed to hit the nail upon the highest as smartly as outlined out the entire thing without having side-effects , other people can take a signal. Will probably be again to get more. Thanks|

  27. fantastic post, very informative. I’m wondering why the other experts of this sector don’t notice this. You should proceed your writing. I’m confident, you have a great readers’ base already!|

  28. Have you ever thought about including a little bit more than just your articles? I mean, what you say is fundamental and everything. Nevertheless think about if you added some great images or videos to give your posts more, “pop”! Your content is excellent but with images and clips, this website could definitely be one of the very best in its niche. Awesome blog!|

  29. With havin so much content do you ever run into any issues of plagorism or copyright infringement? My website has a lot of completely unique content I’ve either created myself or outsourced but it looks like a lot of it is popping it up all over the web without my agreement. Do you know any techniques to help protect against content from being stolen? I’d definitely appreciate it.|

  30. Remarkable! Its truly amazing paragraph, I have got much clear idea regarding from this article.|

  31. Great site you have got here.. It’s difficult to find high-quality writing like yours these days. I honestly appreciate people like you! Take care!!|

  32. Howdy! Do you use Twitter? I’d like to follow you if that would be okay. I’m absolutely enjoying your blog and look forward to new posts.|

Leave a Comment

Your email address will not be published.

Get Started for FREE

Setup only takes a minute. Cancel anytime. No credit card required.