In my last article,we discuss about greed and how it affect our trading decision,i receive some feedback and questions which will be treated in this edition as we continue to undo the enemies of trading successfully.
We’ll now shift towards “Fear and Hope”, another psychological trait which leads to making common mistakes. Fear always leads to illogical actions and hasty decisions which in turn cause detriment to traders.Just as the trader can become overwhelmed with greed, the same can happen with fear ("an unpleasant, often strong emotion, of anticipation or awareness of danger").
We all know that the market has its own cycle going up and down. The underlying reason why the cycle works is human fear that leads to the next cycle in market psychology. Traders become over-confident at the stage of Euphoria and aim at satisfying their fourth need without thinking logically, which can lead to losses and fear. Nevertheless, in the second market cycle fear becomes productive and the trader gets paid. Hence, it is good to have fear of market conditions, which keeps you alert while taking any trading decision, but at the same time too much fear can ruin the trading practice.
Fear in tra…
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