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The Roller Coaster of Trader’s Emotions: 14 Steps That Will Improve Your Investing Decisions
Learning how market cycles operate can be extremely beneficial to your trading, understanding the true influence of fear and greed.
But… Controlling your emotions within the market is your main ‘personal’ objective, becoming an emotionless trader. It’s what we’re all told from day one right?90% of trading is purely psychology. It is the main reason why so many traders fail as they let their trading become over-ruled by their emotions, thus making irrational decisions.Many traders will never overcome their inherent emotional biases, therefore you should seek to understand the range of emotions we may experience as investors and how it affects our interactions within the market.The psychology of trading defines a specified range of emotions that an investor can go through while making an investment decision. Explained below are the 14 stages of investor emotions:
1. Optimism
Almost every investing emotional cycle begins with an intense feeling of excitement. You’re expecting things to go your way or at the very least, to see decent returns for taking on the risk of investing.
2. Belief
This optimism escalates into belief as you witness the market rises even more so and other buyers start to make a profit. You can’t be any more confident.
