HOW DOES PSYCHOLOGY AFFECT TRADING?
We know that we take decisions from our mind, but what we don’t realise is that many times it is our emotions that impact the decision taken by the brain. If not controlled and regulated, our emotions have the power to destroy our brain and make us take wrong decisions.
The scenario is the same for trading in the Share Market. What to buy, when to buy, at what price and what to sell, when to sell and at what price is decided by the investors/traders after looking and studying the market, charts, etc. Many a times, when a person is not in the right state of mind, he/she might take wrong decisions in spite of knowing better. This is because emotions affect the decision-making capacity of a person. For a trader to take proper decisions at the right time, the following psychological factors play an important role:
- A detailed, conceptual and practical knowledge of the market, rather than theoretical knowledge.
- Discipline and quick decision taking capacity.
- Continuous guidance, such that mistakes can be rectified and not taken personally.
- A sound and sorted trading environment.
- Ability to leave all emotions of greed, fear, anxiety, desire and focus only on learning and experiencing.
- Knowing exactly when to stop, even if it means booking small losses to avoid greater losses.
- Knowing when and how much risk to take.
All of the psychological factors are kept in mind at Stakeindia (the oldest stock market/ share market training institute in Nashik, Maharashtra) while imparting knowledge to its students and clients. There are many other financial services available at Stakeindia which have benefited numerous students all over India. Drop us a mail at stakeindiainstitute@gmail.com and we’ll get back to you!
