The psychotrading is a form of study of stock market investments and other markets is to value the relevance of emotions when carrying out operations themselves these activities.
As the most experienced traders are very clear that the emotional factor has a powerful influence on the realization of investments, they want to convey, especially to beginners, the importance of being aware of this influence and learning to control it.
Next, we analyze the keys to psychology in each investor and we provide you with tips so that you know how to articulate them in a positive way. Keep reading.
Investing emotions are part of trading
The use of robots in investment markets is not uncommon, so that most of the decisions that have consequences on investors‘ budgets are made by people. And these people, of course, have feelings that are going to be reflected in the way they operate. Even machines that perform operations automatically have been programmed by people. And the decisions of legal persons that enter this system are also based on emotions.
The most common investment emotions are the euphoria that is unleashed when we win and the fear we have of losses. Both, because they are expressed in absolute terms, should be banished, since they take us away from rigorous decision-making.
On the other hand, one of the most significant factors that you have to take an eye when trading is related to the term in which the operations are carried out. Remember that the influence of emotions will be greater in those that are carried out in the short term. In this sense, you have less time to react than when positions are held in the longer term. The emotional factor, therefore, is put more to the test in this type of play.
Once the main keys to the emotional content that affect those who trade have been introduced, it is time to review some of the situations in which the mind can play tricks. Examples are how these contexts are best understood, so let’s review some of them. Pay attention.
Our trading courses teach you to master the emotional factor
In a trading course they are going to help you know what to do when you face situations like the following. Take note of these mistakes that you can correct through a consistent trading plan and learning about the notes you make about the mistakes you have been making.
- Close winning trades (with the correct strategy) sooner than it would suit you.
- Failure to perform a favorable trade for fear of losing money.
- Adding losing positions to an original trade in anticipation of a change in the market.
- Leave trades at a loss for thinking that they will return to the entry zone.
- Get money in the morning and return it to the market in the afternoon.
- Increase the aggressiveness of your operations after having chained losses.
- Improvise operations without conducting analysis when market turns occur.
- Arrest or reduction, after a loss, of positions.
- Opening of positions that exceed the value of your account.
- Ignore a favorable entry for having failed in the previous two.
- The false sense of security behind big winnings.
- Achievement of small profits that do not increase the account.
- Kill the account for a gloomy market day.
In short, psychotrading does not consist in suppressing emotions, which are inherent to the person, but in knowing how to identify and control them.