Psychology And Emotions

Psychology And Emotions

The most detailed and comprehensive plan is as valuable as the quality of its execution. It’s all too good to have an award winning recipe if the chef simply ignores it – the same goes for trading. A variety of psychological and emotional factors may result in a plan being ignored or misread, such as greed, fear and boredom or excitement.

The most detailed and comprehensive plan is as valuable as the quality of its execution. It’s all too good to have an award winning recipe if the chef simply ignores it – the same goes for trading. A variety of psychological and emotional factors may result in a plan being ignored or misread, such as greed, fear and boredom or excitement.

Common trading plan divergences include holding onto a position when an exit criteria is met along with taking and adding to a position that does not match your entry / addition rules.

Continuous failures due to psychological and emotional factors can be a guaranteed route to a painful and costly end to a traders trading career. Accordingly, a careful self analysis will provide a trader the opportunity to either manage or contain psychological and emotional urges to diverge from the plan or to admit that they lack the self control to trade a self directed account.