Trading Psychology - Fear and Euphoria
Few words from *Trading the Zone* combined with my little input that I felt worth sharing. Here we go!
We know that *Fear and Euphoria* are two big obstacles when it comes to consistency in Trading. Either it stops us from entering the trade or may results in premature entry.
Why we get trapped by these feelings? Let’s me explain for fear since Euphoria is just the opposite.
We Fear, When we Interpret Market information is threatening
Why it is threatening? When it’s not inline with our Expectations. There is nothing worsen feeling than unfulfilled Expectations.
Why we have Expectations? Because we firmly *believe* something is gonna happen next.
So ultimately *BELIEF* is the origin.
So how to resolve this issue??
We start from the Origin that is belief.
* Believe* - you don’t know what’s gonna happen next. Accept the psychological reality of market. Predicting market moves is predicting how millions of people interpret the market information which always may not be inline with our belief. That’s why there are always random distribution between wins and losses in trades. Edge is just the probability of happening one thing over other So accept the small losses. That’s y Risk: Reward always plays a significant part in consistency. Trade with rules we learnt not with Beliefs. Believe only that you don’t know what’s gonna happen next since every moment in market is unique!
*No Expectations* - when you firmly believe that you don’t know what’s gonna happen next. Then There won’t be any expectations from the Markets.
When there is no expectations from the markets then where is the potential to define market information as threatening or Painful or exciting ? There is none!!
At that point, you will be in best state of mind to Perceive the market information and trade mechanically with rules and without or less influenced by fear or Euphoria!!
Happy Trading!
Pradeep A G
We know that *Fear and Euphoria* are two big obstacles when it comes to consistency in Trading. Either it stops us from entering the trade or may results in premature entry.
Why we get trapped by these feelings? Let’s me explain for fear since Euphoria is just the opposite.
We Fear, When we Interpret Market information is threatening
Why it is threatening? When it’s not inline with our Expectations. There is nothing worsen feeling than unfulfilled Expectations.
Why we have Expectations? Because we firmly *believe* something is gonna happen next.
So ultimately *BELIEF* is the origin.
So how to resolve this issue??
We start from the Origin that is belief.
* Believe* - you don’t know what’s gonna happen next. Accept the psychological reality of market. Predicting market moves is predicting how millions of people interpret the market information which always may not be inline with our belief. That’s why there are always random distribution between wins and losses in trades. Edge is just the probability of happening one thing over other So accept the small losses. That’s y Risk: Reward always plays a significant part in consistency. Trade with rules we learnt not with Beliefs. Believe only that you don’t know what’s gonna happen next since every moment in market is unique!
*No Expectations* - when you firmly believe that you don’t know what’s gonna happen next. Then There won’t be any expectations from the Markets.
When there is no expectations from the markets then where is the potential to define market information as threatening or Painful or exciting ? There is none!!
At that point, you will be in best state of mind to Perceive the market information and trade mechanically with rules and without or less influenced by fear or Euphoria!!
Happy Trading!
Pradeep A G
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