Icon close
  • Tenga en cuenta que el sitio web está destinado a personas que residen en jurisdicciones donde el acceso está permitido por ley. STARTRADER y sus entidades afiliadas no están establecidas ni operan en su jurisdicción de origen. Al invertir a través de este sitio web, es importante comprender que no está regulado por la Comisión Nacional del Mercado de Valores (CNMV) y usted no tendrá las protecciones que brinda la CNMV.

    Si decide continuar y visitar este sitio web, reconoce y confirma lo siguiente:

    1. STARTRADER no tiene sede en España ni licencia de la CNMV.
    2. Usted accede al sitio web por iniciativa propia y STARTRADER no se lo ha solicitado de ninguna manera.
    3. Desea obtener información de este sitio web, que se proporciona mediante solicitud inversa de acuerdo con las leyes de su jurisdicción de origen.
    4. Invertir a través de esta web no te otorga las protecciones previstas por la CNMV.
    5. Si decide invertir a través de este sitio web o con cualquiera de las entidades de STARTRADER, estará sujeto a las normas y regulaciones de las autoridades reguladoras internacionales pertinentes, no a la CNMV.

    STARTRADER quiere dejar claro que se encuentra debidamente licenciado y autorizado para ofrecer los servicios y productos financieros derivados enumerados en el sitio web. Las personas que acceden a este sitio web y registran una cuenta comercial lo hacen por su propia voluntad y sin solicitud previa.

    Al confirmar su decisión de continuar e ingresar al sitio web, por la presente afirma que esta decisión fue iniciada únicamente por usted y que ninguna entidad de STARTRADER ha realizado ninguna solicitud.

  • Si prega di notare che il sito web è destinato a individui residenti in giurisdizioni dove l'accesso è permesso dalla legge. STARTRADER e le sue entità affiliate non sono né stabilite né operanti nella vostra giurisdizione di residenza. Quando si investe tramite questo sito web, è importante comprendere che non è regolamentato dalla Commissione Nazionale per le Società e la Borsa (CONSOB), e non si avranno le protezioni offerte dalla CONSOB.

    Se si sceglie di procedere e visitare questo sito web, si riconosce e si conferma quanto segue:

    1. STARTRADER non ha sede in Italia né è autorizzata dalla CONSOB.
    2. Si sta accedendo al sito web di propria iniziativa e non si è stati sollecitati in alcun modo da STARTRADER.
    3. Si desidera ottenere informazioni da questo sito web, che sono fornite su base di sollecitazione inversa in conformità con le leggi della propria giurisdizione di residenza.
    4. Investire tramite questo sito web non concede le protezioni fornite dalla CONSOB.
    5. Se si sceglie di investire tramite questo sito web o con una qualsiasi delle entità STARTRADER, si sarà soggetti alle regole e ai regolamenti delle relative autorità di regolamentazione internazionali, non alla CONSOB.

    STARTRADER desidera chiarire che è debitamente autorizzata e abilitata ad offrire i servizi e i prodotti derivati finanziari elencati sul sito web. Gli individui che accedono a questo sito web e registrano un conto di trading lo fanno completamente di loro iniziativa e senza sollecitazioni precedenti.

    Confermando la vostra decisione di procedere ed entrare nel sito web, affermate che questa decisione è stata iniziata esclusivamente da voi, e che non è stata fatta alcuna sollecitazione da parte di alcuna entità STARTRADER.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

28 April

What Is Trading Psychology?

Trading psychology is an important part of your trading trip. Though the world of trading is full of charts, analysis and numbers, emotions play a major role in making your journey in the financial market rewarding and efficient. In fact, controlling emotions play a major role in helping a trader become successful. This is what we refer to as trading psychology. To dive into the matter, the psychology of trading refers to the emotional aspect of an investor’s decision-making process that can shed light on why certain decisions appear to be more logical than others. Unfortunately, many beginner traders fall into the pitfalls of some emotions such as fear, greed and FOMO. Such emotions can affect their psychology and make them sway away from logic. The good news, however, is that traders can learn strategies to help them control such emotions.

What Emotions Affect the Trading Psychology

1. Fear can affect your emotions while trading in a negative way 

Fear is a human’s guide to avoiding danger as it is strongly related to fight or flight instinct. That is being said, it has positive outcomes. Unless it were for fear, people would have probably fallen into many problems. Yet, being always fearful might lead you not to take any risks and thus not get any great opportunities. Here is how fear can affect your trading psychology:

a. Fear can lead traders to make irrational decisions that are not backed up by logic and analysis of the market. 

b. Based on that, they could exit a trade too early or hold onto a position for too long fearing they would suffer a lot of loss. 

c. Fearful traders can second-guess their decisions, thus become indecisive and miss great opportunities. 

d. They can also become too cautious, and thus avoid taking any risks, which will eventually limit their potential profit. 

2. Greed has a massive impact on your trading mindset

Wanting to possess more of something has led people to downfalls throughout history. When it comes to the world of trading, greed can be a determinant factor in the psychology of traders. It not only clouds a person’s judgment but also leads to making uninformed decisions.  

a. When a trader is driven by greed, they may become overly focused on maximizing their profits and taking unnecessary risks to achieve that goal instead of sticking to logical thinking that is supported by facts and numbers, or what we can refer to as the right trading mindset. 

b. Greed can blind traders, so they might overlook warning signs, such as market volatility or unfavorable economic conditions, and continue to invest even when the trade is not going in their best interest. 

c. Greed can also cause traders to become overly attached to investments or positions, making it difficult for them to cut their losses and move on.

3. FOMO (fear of missing out) can lead to lose your control over your emotion

FOMO, which is initial for fear of missing out, is an emotion that can lead you to make impulsive decisions and follow irrational behavior. Unfortunately, it is one of the common feelings experienced by traders of all levels. Here are a few ways in which this feeling can impact a trader’s emotions and psychology:

a. Traders experiencing FOMO may feel like investing in a stock or asset that is trending, even if it doesn’t fit their overall strategy or risk tolerance, which might result in losses. 

b. Hoping that the market would turn to their best interest, traders experiencing FMO can choose to hold onto losing positions for too long as they do not want to miss out on potential profits. 

c. FOMO can create a sense of urgency. This urgency leads traders to make impulsive decisions without conducting proper research or analysis.

4. Overconfidence is a factor that you should consider when setting the right trading psychology

Overconfidence can blind you from making the right move. As a trader, you should have confidence in your abilities, but when you are overconfident, you can make decisions that are not backed by the proper analysis. Here are a few ways in which overconfidence can impact a trader’s performance:

a. Overconfident traders may take on too much risk, believing that they can always make the right call and come out on top.

b. Overconfidence can cause traders to ignore warning signs or market trends that indicate potential losses.

c. Overconfident traders may also engage in excessive trading or take positions that are too large for their account size, leading to significant losses if the market moves against them.

How to Improve Your Trading Psychology? 

Now that you understand the most common emotional pitfalls in trading, it’s important to develop strategies to control these emotions and make more rational, objective decisions. Some tips for controlling emotions in trading include:

a. Set clear goals and stick to a trading plan that aligns with those goals.

b. Practice mindfulness and self-awareness to recognize when emotions are impacting your decision-making process.

c. Use risk management tools, such as stop-loss orders, to limit potential losses.

d. Take breaks and step away from trading when emotions are running high.

By implementing these strategies, traders can improve their performance and avoid falling into emotional traps that can lead to significant losses. Once you have set your account, chosen a trusted platform such as MT4 or MT5, and a trusted and globally regulated broker such as STARTRADER, work on your strategy, and become ready to start your trading journey, do not forget to work on your trading psychology. It will help you stay focused and potentially achieve better returns