* 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.
You become a victim of emotion when you don't have a believed trading system or strategy that works, which guides you to know the entry and existing point of each trade. And to tackle this, one should develop a trading strategy around chart patterns because they are technical analysis simplified which tells you the time to get in and get out of the market because of its proven historical performances in the past.
I think emotion is the greatest problem of a newbie trader. We all have gone through this while starting up but because of experience we can now discuss it as something not very serious but emotion is very serious and need to be put in perspective. One of the ways to work out the fears or emotion is to learn good money management. We fear of our emotion because we don't want to lose our money, so in the same light, if we use stop loss we will do better. However, this is difficult for a new trader to totally leave out emotion while trading because sometimes an experienced trader has same fear.