The Personal Side of Stock Market Trading 

Some people view trading as a mechanical process that varies little. Traders set goals, make a plan and follow it. It sounds easy enough and this is the case in a way. A successful trader must have good goals and a solid plan to survive and improve. What people do not realize is the emotional aspect of trading. When things go wrong, some traders take it very personally. They become upset, feel discouraged or get down on themselves because of their lack of skill or knowledge. This can doom your future if you allow it to go too far. Emotion is a very valuable tool that can drive you to improve if you use it the right way.

Cut Emotional Ties to Trades

It may sound strange if it hasn’t happened to you, but some traders actually develop an emotional tie to the stocks they purchase. They view the status of their investments as a symbol or indication of their capabilities. Each stock becomes a success or failure in their life. This can be a very bad thing that can play on your stress levels and health. Stocks should be viewed as business transactions. When you purchase stock, you have absolutely no influence on the health of that stock. There are many other factors you simply cannot control. All you can do is gather information and make a good decision about the transaction.

Sometimes, that emotional tie can also sway a trader to not make a move that would be beneficial to their investment career (such as selling off the stock). This is also a bad move. You are in this game to make a profit and learn the market. You should not hold on to a specific stock because of an emotional attachment. If you do, you could find yourself losing money on multiple investments that are going nowhere.

Getting Over the Emotions

When getting into the stock market, remember to remain objective and view your transactions as all business. Let emotions encourage or help you learn from mistakes, but do not latch your emotions on to a specific stock. Be methodical about your trades and follow a solid investment plan. When you begin placing emotional significance on each transaction, you will begin to run into serious problems when you have to make decisions in the future.

A successful trader will learn from their mistakes, follow their plan, and assess himself or herself while managing risk. These are the main focus areas that can help you improve. Also keep in mind that many new traders lose out at first, and this is completely normal. If you remember to view your trades as business, you can avoid emotional attachment and focus your energy to simply improve everyday.

 

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