Buying and Selling Stocks – Controlling Your Emotions

When a trader loses money, it is usually because they can not control their emotions. Those who act on their emotions often make irrational decisions. So, learn how to control emotions when the transaction will be one of the most important aspects of success. Successful traders can view the market objectively and are emotionally disconnected from market events.

Fear and greed are two main emotions that traders need to overcome. They are all very powerful emotions. When humans anticipate injury, they are instantly shocked and quick to respond. In the market, the reaction to fear usually causes the trader to make an impulse decision that leads to a transaction error. Fear of losing money may cause someone to sell the stock before the target price.

The victorious merchant is free from fear and greed. When stocks fall, they will not be overcome by fear. They expect the market will be down. When an inexperienced trader sees a stock reaching its goal, they tend to be driven by greed and keep the stock in the trade, hoping to get bigger profits. So, set your target price, accept your profits and sell. You do not actually make a profit before you sell the stock.