#TradingPsychology Human psychology is the foundation of stock trading. Everyone makes deals based on their understanding of the market, themselves, their interests, and goals. Trading on the stock exchange is related to the concept of cognitive distortions. How to explain this - it is a judgment that contradicts common sense. Distortion under a number of stress factors: emotions, personal conclusions, societal pressure. If they are not understood, they work like traps, causing one to act to their own detriment.
Cognitive distortions in trading are:
FOMO - fear of missing out on something important, interesting. The market constantly plays on people's emotions.
FUD - fear, uncertainty, doubt, the flip side of FOMO. This is a state when confidence is undermined and we do not know what to do next. It often arises during crashes in bear markets, and can also occur during intraday trading when the market goes against expectations.
Tilt is a state in which emotions take over reason, "the mind drifts." Tilt can be positive or negative. You want to recover losses, but ultimately you lose even more, and it can be enjoyable, "euphoria." Trading in a state of tilt is categorically prohibited!