Stock Market: The Land of Greed and Fear
The major players in the stock market emotions are greed and fear. They are the forces that drives all market participants - Stockbrokers, institutional managers, traders, investors and yourself.
Perhaps you believe that you will not let fear and greed would never be in your way of trading, but I can assure you that they will be. It is not something that should cause shame. It is something you have to face it, recognize it and deal with it, if you plan to be a successful trader or investor
What do greed and fear look like in the stock market trading arena?
You have been noticing a particular stock for some time now. The stock seems to be doing well, so you made a decision to buy. You bought it at a reasonable price and now it is trending higher just as you anticipated it would.
Now your greed pops up to the scene and convince you that this security is heading up like a rocket. So you are motivated to buy more of the stock, another possibility is that your stock is advancing higher and reaches beyond the selling price that you have planned to sell for. Now greed makes you believe that the stock will continue in an uptrend till the next day and so you hold on to it.
When stocks move higher to the upside, greed causes the market participants to join in hoping for big profits.
Stock prices usually fall faster then they go up, and when this happens, fear now steps up to the plate.
Let us consider the example above, where you security advanced higher than the price you planned to sell for and you held on because greed controlled your emotions. The next morning the security price was lower than the previous day. Greed is convincing you that the stock price would rebound though it is now being dumped by traders. you continue to hold one while the price is in down spiral. Now fear is by your side, your profit has turned into a loss.
Everyone goes through this until they have mastered the ugly faces of greed and fear. Master this and you are well on your way to becoming a successful stock trader. - 23311
Perhaps you believe that you will not let fear and greed would never be in your way of trading, but I can assure you that they will be. It is not something that should cause shame. It is something you have to face it, recognize it and deal with it, if you plan to be a successful trader or investor
What do greed and fear look like in the stock market trading arena?
You have been noticing a particular stock for some time now. The stock seems to be doing well, so you made a decision to buy. You bought it at a reasonable price and now it is trending higher just as you anticipated it would.
Now your greed pops up to the scene and convince you that this security is heading up like a rocket. So you are motivated to buy more of the stock, another possibility is that your stock is advancing higher and reaches beyond the selling price that you have planned to sell for. Now greed makes you believe that the stock will continue in an uptrend till the next day and so you hold on to it.
When stocks move higher to the upside, greed causes the market participants to join in hoping for big profits.
Stock prices usually fall faster then they go up, and when this happens, fear now steps up to the plate.
Let us consider the example above, where you security advanced higher than the price you planned to sell for and you held on because greed controlled your emotions. The next morning the security price was lower than the previous day. Greed is convincing you that the stock price would rebound though it is now being dumped by traders. you continue to hold one while the price is in down spiral. Now fear is by your side, your profit has turned into a loss.
Everyone goes through this until they have mastered the ugly faces of greed and fear. Master this and you are well on your way to becoming a successful stock trader. - 23311
About the Author:
Learn more about stock trading on the internet. Stop by Leyla Maker's site where you can find out all about how to trade stocks onlineand how it can help you.
posted by Mr. Forex at
7:40 AM
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