#TradingPsychology

Trading Psychology simply refers to the feelings and emotions of a trader experiences and the associated actions the trader takes as a result. Just like in any other aspect of life, understanding how our mind works can improve our ability to trade better, take more informed, rational decisions and calculated risk.

For instance, you might have seen people take emotional investment decisions. So even when the price of a stock in their portfolio is declining, they might keep holding on to it because they regularly use the products and services of that company and trust the company enough to take the risk. In this case, admiration leads them to overlook the evidence. It is therefore crucial to understand how to identify such emotions and to control them to prevent losses. Traders with better control over emotions tend to make more rational choices and thus often end up with more profits.