10 Common Trader Problems Problem 7: Emotional Trading

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We are all driven by emotion. Everything in our lives, we do for a feeling. We do sport, we take up hobbies, we have kids, and we get married and its all for a feeling.

But emotions come first and logical thinking comes much later down the road.

And because of that, when you’re out there trying to make money in the markets without really understanding what you are looking at, you rely on your emotions to tell you what to do. But when you do this in trading, you come unstuck and heres why;
When the markets start to move, the rookie trader watches the rally and the 2 emotional drivers of excitement and fear-of-missing-out compel them into a taking a trade.

But they have got in too late and they will get shaken out when the smart traders start to capitalise. If trading is fun, exciting or exhilarating, you are definitely losing money.
Im not saying that trading should be extremely boring, but it should be systematic.

You should have a situational specific strategy that puts you into the market and gets you out of the market without being driven by fear or greed.

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