TRADING IS A GAME. DON'T LET EMOTIONS TAKE OVER YOU

Types of Emotions

There are three important emotions while trading in stock market. Management of emotions is extremely important in this market of risk and reward. This is as valuable as a good trading system to make consistent profits and avoiding losses in stock market.

► Fear

When we think that price will go against our direction of trade, then there will be a feeling of fear. Because of fear even if we take trade on the basis of our system of trading, we may exit soon with small profit or with loss. This fear will not allow us to follow our system of trade.

► Greed

When we think that price will go in our favor, there will be a feeling of greed. This feeling of greed becomes harmful when our system is giving the signal of exit but we are standing in the market in the hope of more profits and stuck in the trap of fear and greed.

► Patience

This is the solution of the problem of fear and greed. Fear and greed can be easily controlled by this emotion. If we have patience and belief in the system of trading then our actions will become mechanical i.e. free from fear and greed. If we can win patience, then only we can win the stock market with good system of trading.

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