Who is the Worst Enemy of a Stock Market Investor?

For every stock market investor or trader, there is one most prime enemy that lets everybody lose his trades and waste the invested money. This enemy is very dangerous to the career of a stock market trader. No matter what trading system you are using, how experienced you are or what tools you are using, if you are attacked by this enemy, then you would have to strive for sustaining in the market. You might have guessed who that enemy is. If not, then you need to know that the biggest enemy of any trader is “Emotions”.

Not only stock market but any other financial market is affected by the power of emotions. In fact, markets are controlled and driven by these emotions. However, this force is dominant which makes trading as a serious business. If emotions were not there then everyone would have become a professional trader. Professional traders have become professionals and successful since they trade emotion free and take the advantage from the mistakes that emotional investors make.

Just before entering the stock market trading, you must be prepared with the basics of trading and market and must have formed your own trading strategy. It is very important for an investor to prepare himself prior jumping in the arena. Only at the first step, several investors get emotional and without preparing themselves they start trading to earn profits. But such investors pack their bags soon and leave the market forever. It is not their fault but they are punished for being emotional. They get influenced by the success of dear ones or are trapped in the dreams shown to them by stock brokers.

After you have done your homework and have formulated a trading strategy make sure follow it like your religion. Never change your strategy just because you lost few trades. Some traders commit this mistake of changing strategy frequently and they get failed to know which strategy works for them. Sticking to one particular strategy make you disciplined about trading and it is the one sign of a professional trader who could fight emotions. If you want to be successful then buy or sell under your strategy only.

Stress, fear and greed are the top most emotions that could ruin your, trading career. So, beware of them and protect yourself against them. Stress could be of anything. It is important for trader to trade with peace of mind, without stressing himself. Just avoid overtrading and stick to your, trading strategy. Fear is another emotion which could shake even a strong and experienced trader. Sometimes market movements could generate fear in you. Fear of losing your investment. Don’t panic in such situation. Stay calm and trade with patience. Last but not the least greed, is that emotion which has disturbed a lot of traders. Most of the traders take wrong decisions just because of greed. If your stock is rising with a fast pace then you would certainly hold it for long just to see how long it could rise. It is human nature. However, in reality it is greed. You must know that, stocks fall with the same pace with which they rose. So, trade smartly and avoid greed. Usually these emotions surround a trader altogether but even one of them is harmful for your, trading.

You must develop a sound strategy to deal with emotions while trading. Following points are to be considered to formulate such strategy-.

1) Stick to your chosen trading plan.

2) Think every aspect before entering any trade.

3) Losses are part of a game and very likely to occur. Accept them and examine the cause of failure.

4) If you are stressed or high at emotions, simply do not trade. It is not only bad for your finances but also for your health.

Emotions are a part of human nature and you could not stop them. For being successful, you must learn how you could avoid them.

Emotions are the biggest enemy of stock market traders. At the time of emotions, traders must avoid trading. Moreover, a strategy must be developed to deal with emotions. Visit tim sykes page for more reviews and articles about stock market secrets.

Share

About the Author

Leave a Reply

Your email address will not be published. Required fields are marked *