14 EMOTIONAL STATES OF A TRADER
Many traders whose trades are controlled with emotion, such as rushing to exit trades even though they have not yet reached maximum profit. Or let a losing trade linger until it can't be controlled anymore. Yes, this is what many traders experience, especially novice traders who are still unable to control their emotions when trading.
In fact, apart from using good analysis and strategy, emotional control is also very necessary in trading. There is a trader who has mediocre analytical and strategic skills, but can consistently and heavily generate profits. Of course this is because the trader's self-control and emotions are very good, so that his strategy plan is not rushed and structured.
That is why traders must also learn about trading psychology, so they can better control their emotions and psychology when trading. No matter how smart we are as traders, we will still be defeated by bad self-control. This is due to confusing market movements, and of course it will make it easy for traders to feel confused about making the right decisions in the market.
It all starts with a positive outlook on the market situation, which leads the trader to open a trade. The trader is looking forward to future success.
The market starts moving in the predicted direction. The trader anticipates events and hopes that success is assured.
The market continues to move in the direction the trader needs, this is a moment of joyful fading. At this stage, the trader is completely confident in his trading system.
The point of maximum financial risk. Investments turn into quick and easy profit. The trader completely ignores the risk.
Oh no, the market is turning! The first signs of movement not in favor of the trader appear. But he does not notice this and believes that the market will recover and the trend will continue.
The expected market recovery did not happen. The trader does not accept what is happening and remains in the position.
Reality dictates its own rules, and the trader begins to realize that he is not as smart as he previously thought. Instead of confidence in success, thoughts begin to get confused.
At this point, all profits are lost. The trader had a chance to take profit, but he missed it. Not knowing how to proceed further, he is trying to do everything to return at least to the break-even point.
The most emotional period. At this stage, the trader feels his ignorance and helplessness and is completely at the mercy of the market. The mind is paralyzed, which sometimes leads to meaningless actions in the market.
The trader has reached the limit of patience and closes the position in order not to increase losses anymore.
After exiting the market, the trader no longer has the slightest desire to conclude deals.
The trader begins to blame himself for stupidity, for why he did not close the deal on time. Some choose the right path and begin to analyze what went wrong. True traders are born at this stage, studying past mistakes and drawing conclusions.
“I can still do it!” Eventually, the trader returns to the realization that there are indeed cycles in the market. He begins to analyze new possibilities.
At this stage, the trader regains faith in his future in the market and starts trading again
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