In financial markets dominated by vast mounts of data, sophisticated analytical programs and quantitative strategies, concerns about the psychological aspect of trading may seem quaint.
However, in reality an understanding of trading psychology has never been more important.
It is precisely when we forget to question our motivations and emotional state that we become vulnerable to poor decision-making.
While the digitization of trading may have transformed many aspects of the profession, little has changed in the realm of trading psychology.
The old lessons learned the hard way over decades of experience are still as applicable today as they were when they were first learned.
In this guide we will briefly examine the four strongest emotions in trading psychology:
- FOMO
- Fear
- Greed
- Hope
Then we will look at what traders can do to master their emotions and ensure that they are making clear and informed decisions every time.