Overview
Trading psychology is a crucial aspect of successful trading that focuses on the emotional and mental factors influencing traders' decisions. Understanding how emotions like fear and greed can impact trading behavior is essential for developing effective strategies. By recognizing cognitive biases a...
Key Terms
Example: A trader who remains calm during market volatility demonstrates emotional discipline.
Example: Setting stop-loss orders is a common risk management technique.
Example: Bullish sentiment indicates optimism about price increases.
Example: Confirmation bias leads traders to favor information that confirms their existing beliefs.
Example: A trader buys a stock impulsively due to rising prices, fearing they will miss out.
Example: A trader may overtrade after a series of losses, trying to recover quickly.