Stock Price Action Analysis Course

Lesson 24: Trading Psychology and Emotional Management Techniques

Most trading failures are not due to technical issues, but rather emotional ones. Today we will discuss the psychological traps that traders are most likely to encounter, and practical techniques for maintaining a stable mindset.

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I. Common Trading Emotional Traps

1. Fear

→ Hesitating when you should enter, not daring to execute stop-loss orders, ultimately missing opportunities or causing greater losses.

2. Greed

→ Clearly reaching the preset target but wanting to earn more, resulting in a reversal and loss.

3. Revenge Trading

→ Just lost a trade, eager to "get it back," resulting in emotional mistakes twice in a row.

4. Self-Doubt

→ Analyzing correctly but not daring to execute, or doubting yourself as soon as you enter a trade, leading to an inability to hold positions.

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II. Emotional Management Techniques

• Confidence through a systematic approach:

→ Operate strictly according to the trading plan. When you know "you will stop-loss if you are wrong," you naturally won't be afraid of being wrong.

• Write down your trading mood and behavioral reflections every day:

→ Cultivate awareness and slowly find the emotional patterns in which you are most likely to make mistakes.

• Use small positions for practical training to stabilize your emotions:

→ Start with smaller capital to train yourself to remain rational under pressure.

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A stable emotion is what supports even the most accurate strategies.