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 are saying that you will never let fear and greed interfere with your trading, but be assured that they will be. It is not something that you should feel ashamed of. It is one thing you have to realize, come face to face, if you are determined to be a successful stock trader or investor
How do greed and fear look in the stock market trading stage?
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 interferes and you believe that this stock price is shooting high. So you decide to buy more. another scenario is that your stock advances a few points beyond your exit price that you have planned for. Greed convinces you that that stock will continue to move in an uptrend tomorrow, so you hold on.
When stocks make strong moves to the upside greed from all the cumulative market participants joins the move.
Securities prices in most situations plummet quicker than go up and when this happen fear steps up.
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. - 23204
Perhaps you are saying that you will never let fear and greed interfere with your trading, but be assured that they will be. It is not something that you should feel ashamed of. It is one thing you have to realize, come face to face, if you are determined to be a successful stock trader or investor
How do greed and fear look in the stock market trading stage?
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 interferes and you believe that this stock price is shooting high. So you decide to buy more. another scenario is that your stock advances a few points beyond your exit price that you have planned for. Greed convinces you that that stock will continue to move in an uptrend tomorrow, so you hold on.
When stocks make strong moves to the upside greed from all the cumulative market participants joins the move.
Securities prices in most situations plummet quicker than go up and when this happen fear steps up.
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. - 23204
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 X - Men @ 6:42 AM
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