Trading Psychology

Everyone one of us would love it if all of our trades were winning trades, but we know that won’t happen. We all think that if a trade has lost money, it was a bad trade. We try to find where we went wrong. I lost money therefore I did something wrong. Are all losing […]

In the last two articles we explained what biases are in trading and what some of the common biases are. This week we will be looking at how to overcome these biases.   We all have biases, its part of our human nature, and in order for us to work through them we first need […]

What are some of the most common biases we face as traders? There are an infinite number of biases we face daily, the ones that are listed below are the most common ones faced by traders. They are not ranked in any specific order:   Optimism/pessimism bias Your past and recent results have a big […]

When your money is at risk, you get easily fooled by your behavioural biases. Trading is about decision making, making all the right decisions, so its better to know your strengths, weaknesses and what sets your emotions off.   Before we can go further into biases, we first need to know what a bias is. […]

Why is it important to be consistent when trading? Consistency builds habit and having good habits ultimately defines who we are as people. Consistency in sticking to an effective trading strategy, this will help you to master that trading strategy and will allow you to see if that strategy is really working for you or […]

There are four types of animals trading the market:   Bulls Bears Sheep Pigs   Bulls and bears make money – Sheep and Pigs get slaughtered.   Bulls: Like a bull who fights with his horns up, bulls are bullish, they believe markets are going up and look for triggers to trade in that direction. […]

Staying consistent in trading is an important aspect to trading. Its easy to make money but keeping it may be another story. Here are some easy tricks you can use to become a consistent trader:   Having a game plan Having a detailed plan of attack or game plan will give you the necessary framework […]

A study was done a few years ago where they measured two emotions in seasoned traders while they were trading.  The first was determination (how determined were the traders to make profitable trades?) and the second was frustration (how frustrated were the traders at the same time?)   The study concluded that when the trader […]

Revenge Trading   We have covered revenge trading in previous articles but now we are going to look at revenge trading and how we can use CBT as a solution to help prevent revenge trading. The biggest reason why we catch ourselves revenge trading is because we are emotionally invested in a trade. Here is […]