If your losing trades cause excessive emotional distress, you will find it difficult to analyse the market rationally. There is a danger that you will start over-trading in an effort to make back losses or to ‘get even’ with the market. This is likely to place you in an even worse financial and emotional position. On the flip-side, profitable trades can generate feelings of elation and invincibility. If you make the mistake of allowing this emotion to take hold, you may find yourself taking excessive risk or making silly mistakes through carelessness. Where possible, you should aim to keep your trading related emotions under control. Using a tested and proven strategy can help you minimise mistakes associated with emotion. Another mistake that is common among traders is the desire to focus only on positive outcomes. People tend to start thinking about how they might spend their potential profits, while ignoring the downside risks. Wiser traders will focus on the downside risk potential of each trade and will make sure that this is within their predefined parameters.
IOT Price at posting:
7.8¢ Sentiment: None Disclosure: Not Held
