Trading Psychology
A recent survey from Betterment shows an increase in day trading during the pandemic. That’s great, BUT be aware, trading is a mind-game, not everyone is cut for. The best traders realise they are fighting – not only the markets – but also themselves ????
Over millions of years of evolution, we have developed very effective survival strategies. When facing a threat, we either fight it, we run away, or we freeze. Even though trading is hardly a matter of life or death, our emotional reactions in a challenging market are basically the same as they were when our ancestors faced a fierce predator thousands of years ago.
The best traders know their emotional reactions, and how to cope constructively when markets are pushing them out of their comfort zone.