14 Emotional Dangers For Traders
Anger- Revenge trading
Fear- Inability to take an entry or hold a winner in a trend.
Disgust- Can lead to loss of a traders confidence.
Happiness- Surprisingly can lead to trading too big and taking on too many positions.
Sadness- Can lead to having difficulty taking the next trade entry or cutting a loss.
Surprise- Can many times lead to making decisions based on emotions and abandoning a trading plan.
Neutral- Trading is a lot of work and only passion and energy can move you toward doing the required homework that leads to eventual success.
Anxiety- Can lead to exhaustion due to excessive stress.
Love- If you truly love trading the markets then only time separates you from success. If you love the wrong things or people it can be destructive.
Depression- Leads to abandoning your trading.
Contempt- Having contempt for the markets or other traders will result in bias and bad decision making.
Pride- Leads to trading too big, not cutting losses fast enough, and wanting to be right and prove something more than being a rational trader.
Shame- Makes it difficult to talk to others about your trading and look at your account capital due to your bad decisions.
Envy- Leads to external focus instead of the internal focus needed to trade successfully.
Trading is only successful long term when it is done with the mind, emotions are only valuable if they create the energy in you to get you where you truly want to be. Emotions are positive if they protect our psychological boundaries, not so great if they just support an out of control ego. Emotions are great tools at times but terrible masters.
Via Riccardo Hertel: Where emotions are felt. Interesting map, from an article to appear in PNAS.
http://www.pnas.org/