#TradingPsychology

What is Social Psychology in Trading?

Social psychology is the science that studies how people affect each other and how the behaviors of the majority pressure an individual, leading them to make decisions that are not always rational.

In the trading world – especially on platforms like Binance – we see this every day:

People enter a trade just because everyone is buying.

Or they sell quickly just because many people are selling.

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The most common psychological effects you face while trading:

1. FOMO (Fear of Missing Out)

When you see a coin skyrocketing, you say:

"Oh no! It's going to pass me by, I have to hurry and buy!"

But when you enter, you might have entered at the peak… and the price drops, causing you to lose.

2. FUD (Fear, Uncertainty, Doubt)

If you see negative news or rumors about a coin, or many people selling, you might panic and sell… even though the fundamentals of the coin are strong.

3. Panic Selling

The market drops hard, you see people selling quickly, so you get influenced and sell… and then you find the market rising again while you exited with a loss.

4. Herd Mentality

Everyone is moving in one direction, so you follow them… without thinking for yourself.

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Examples from Binance:

Example 1: A coin suddenly rises

A coin like PEPE or DOGE skyrocketed because of the trend.

Everyone rushed to buy, the price exploded… then it dropped significantly afterward.

Those who bought without thinking lost, and those who understood #TradingPsychology