Psychology in Trading

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An Important aspect

By Tom

An important aspect of success in trading is trading psychology. Foremost within this realm of trading psychology is the concept of discipline. Greed and fear are the two most dangerous emotions to a trader. Discipline is the remedy for these destructive emotions.

The concept of discipline can take many forms. This includes discipline to:

  • -Refrain from overtrading
  • -Adhere to a sensible money management regimen
  • -Act according to a structured trading plan
  • -Cut losses and let profits run
  • -Follow religiously a trading system with a proven positive expectancy
  • -Trade without succumbing to the destructive emotions of greed and fear
  • -Avoid chasing a runaway market
  • -Use stop losses and/or trailing stops
  • -Stay out of a trade if there is no valid reason to be in that trade



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