Good day everyone, let's talk about the factors in our Trading decision in terms of psychology. There are many things that affect our decision-making, and that's why sometimes we don't know why we make that decision. Sometimes we are repeating the same mistake over and over. Let's find out the common triggers that happen in our brain that make our judgment poor in trading.
* Emotions in trading
Our emotions are part of our human behavior and it has a profound impact on our trading decisions. In the context of trading, the two primary emotions that affect our decision-making are "FEAR and GREED" Fear is a powerful emotion that will push us to think twice about entering and exiting the trade. Sometimes because of our fear of the trade, we exit immediately even though we know that it is too early to do so. And when fear dominates we become overly cautious, which also causes us to miss the opportunity for profitable trade even though we have seen the high probability set-up we should enter a trade but we don't because of fear.
It's the same when we enter a trade, we immediately exit because our immediate thought is that we might still lose. This is also due to fear, Now if we are Greedy it also has an effect on our decision-making. Because this will push us to take excessive risk because we want a higher return. So, because of greed, we will increase the leverage that the position size is too big, the type that can only gain a lot, we will trade 100% capital in just one trade. It will also cause impulsive action, and we will also be tempted into speculative trades without proper risk management.
There are numerous factors which effects our success rate but foremost among these are emotions and if we don't know how to control our emotions then we will not get our desire aim. I think those who don't have the understanding about market Fluctuations, don't know that it will recover back and don't know that ups and downs both are essential for success can never make profit.
Greediness comes when you are not happy with your profit and desires for more than this. Actually one will never days that their desires become completed because everyone wishes to be more successful than this so I think that one should be happy with his present and don't involved in greediness.