Trading Psychology

Everyone knows how to eat healthily: more vegetables, less junk. Doing it at 11 pm with a pizza box open in front of you is a different story. Trading is the same. The rules are simple: small risk, stop losses, follow the plan. Following them while real money is moving up and down on your screen is the actual skill.

Fear

Fear shows up quietly, often disguised as being "careful":

• Closing winning trades too early, grabbing a small profit because you are scared it will disappear, even when your plan said to hold for the target.
• Skipping valid setups after a few losses, then watching the trade you skipped hit its target.
• Moving your stop loss randomly, or closing a trade the moment it dips slightly against you.

Fear-driven trading tends to produce small wins and normal-sized losses. Over time, that adds up to a losing account, even with a decent strategy.

Greed

Greed is fear's loud cousin:

• Oversizing after a win, because you feel unstoppable.
• Removing your take profit to "let it run" with no plan for when to get out.
• Adding to a trade on impulse, turning one planned position into a much bigger one.
• Chasing moves out of FOMO. FOMO stands for "fear of missing out": jumping into a trade after a big move simply because you cannot bear to watch it go without you.

Revenge trading

Revenge trading means jumping straight back in after a loss to win the money back, usually with a bigger position and a sloppier setup. It is one of the fastest ways to turn a small, normal loss into a damaging day.