Psychology is a key element in financial operations, and the way you perceive and react when operating can have an important impact on your success.
Psychology, how it feels in relation to its operations and how it responds to them, is a fundamental part of operations and yet, often, it is a factor that is overlooked. All traders see the same prices, read the same news and analyze the same charts, so what makes some traders profitable and others not?
A wide range of emotions can affect your operations, both positively and negatively. Emotional operations can have different forms, but they are almost always a bad idea.
Fear: Some people find it difficult to make the transition from the use of a demo account with virtual funds to a real trading account. When their own money is at stake, they may suffer the anxiety that their operation will be paralyzed.
Greed: when your operations go well, it is natural to be excited about the possibility of achieving even greater profits.
Stress: it is logical to avoid operating in times of stress. A problem or concern, family or work, can cloud your judgment and affect your operations.
Happiness: similarly, especially happy moments can affect your operations. You might feel too optimistic and take risks that in another situation you would not take.
Anger: should avoid, in particular, thoughtless reactions. So, for example, you should never try to return to the market after a losing operation.
You should try to avoid including your feelings in decision making. Some investors make the mistake of staying anchored to actions that were profitable in the past, without considering the current situation.
Just because an instrument has worked well in the past does not mean that, automatically, it will be profitable in the future.
Unfortunately, Indices and Shares do not remember good times just like you and, of course, the market does not care about the personal impressions you may have of them.
