Hi everyone, I trust y'all doing well. Firstly, I want to thank Prof. @venom-21 for the lecture which he has given us on trading psychology. He has fully explained it to my understanding, and I believe also to the understanding of everyone else.
Trading psychology is really something every trader should know. I am really glad to have been a part of this lecture. This lecture will always remind of how to trade in the market, how to know and control my emotions while trading.
Fear, as Prof. @venom-21 has stated, is one of the things that affect traders. It surely give them pressure including myself in the few trades I have done. I myself, also have that fear while trading, but as Prof ahs said, with controling one's emotional, one can really succeed in the market. He also made me understand that one of the things which makes traders to jump into trades without greediness.
Pigs are those investors who do not make proper analysing, yet makes heavy investments because their plan is to make the large amounts of profits within very short time intervals and they end up suffering severe losses.
That statement above, really caught my attention. I can't really imagine why someone would just wake up in the morning, and cos of greed, jump into the market without analysing it just to get so much profit. Indeed in the long run, a whole lot of them loose a lot.
A proper analysis is essential before going into the market just as Prof has said. I must say that I am very happy to have attended this class. I really don't know how to express how happy I am, but to be frank, I have never read or seen anything like this before. Many people need to be aware of such strategy, that trading psychology exists and our emotions too also affect our trades. Thank you Prof. @venom-21.
Now to answer the questions
Q1. Explain what you understand by trading psychology.
Trading psychology is the mind set of a trader before, during, and after a trade. This mindset is what affects both negatively and positively, the trade which a trader makes. It determines the success or failure of the trade. The emotions which also connects with the psychology of the trader can help him or her to succeed in the market. When the state of mind is relaxed, focussed and not distracted by anything, with good and quality analysis, then a trader is set to succeed.
Q2.Explain any 3 out of the above listed emotions which occur in trading.
1) Greed
Greed is when a trader want to accumulate as much profit as possible from the market without proper analysis. A trader wakes up in the morning, and without a steady and sound mind, jumps into the market and makes a trade. In order to get much profit by any means necessary, he goes into the market and makes a trade without even looking at the consequences or determining the end result. In the long run, he fails and losses extensively.
2) Fear
Fear is one of the emotions which affects traders. I must also include that even myself at some point have had fear while trading, during the few times I have traded. Fear also occurs when good analysis is not done about the trade which a trader want to make and then when he enters into the market, due to the fact that he/she doesn't really know what he/she is doing, tension comes into play. At a point, a trader also cancels a trade. And most times there's also a huge loss.
In order to be a successful trader, one has to be able to control that fear. There are somtimes too even if proper analysis is achieved, fear still comes in. But one has to be able to control that emotion if he/she is ready to be a successful trader in the market.
3) Pride
Pride is when a trader thinks he/she is really good analysing the market and tends to make trades anyhow without calming down to really analyse it. It occurs to most traders in the market, and while some make profits, some really fall to their losses as well.
They forget that the market is volatile and because they know all or a few things about the market they feel they are inferior to the market. This is wrong. Pride should be out aside in order to succeed in the financial markets.
Q3. Explain How you plan to Build a good trading psychology.
1) By having a sound mindset before trading
The first thing I would do is to build a sound mind first. Without that sound mind, it is very difficult to carryout trades. When the brain is relaxed and not overworked, it would really help me have a sound mind before I trade.
2) By staying focused during the trade
Staying focused is also essential while trading. Allowing anything to distract my attention to the market will not make me focussed and on the long run, bring nothing but loss to me. I would remain focused in order to get profit. Some people even thought they've made proper analysis, tend not to be focused. This is wrong. One has to be focused on a trade.
3) Proper analysis
With proper analysis, one can achieve greatly in the market. I would as well analyse the market properly before taking a trade in order to get profit. I would not do as some traders who do not analyse the market before making trade.
Q4. Develop a simple Trading goal and how you plan to achieve it.
My simple trading goal is straightforward.
Proper analysis > Clear mindset > Make trade > Make profit
First and foremost, is to make proper market analysis becaus that's one of the basic factors which will determine my success. After that, it is to have a good and clear mindset before I enter the market. And then I'll make my trade, and then get my profit. It is a gradual process and not something I should just do to get massive profit which is greed. I wouldn't want that as it might lead to a great loss.
I can simply achieve this my reminding myself of the trading psychology, strategies, and emotions, and so how to deal with these emotions and over take them in order to succeed in the financial market.
CONCLUSION
Trading Psychology is very essential and every trader should know this before going into the market. Emotions involved in the trading market determines the success or failure of the trader, hence the need to control them to succeed. Lastly, greediness will never take anyone anywhere, so it is best that we scratch off greediness from us, but make the little profits we can daily and consistently in order to be successful traders.
I think you once again, Prof. @venom-21 for this wonderful lecture. I have really learnt what I haven't before, and I really appreciate it. Thank you.
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Thank you so much @blurttribe and @obikay for your continuous support.
Hello @vectorshore it's nice that you have done my homework for this week. Below are your grades;
Observations;
• You have attempted all questions and answered completely. But your answers were rather brief, however it was quite straight to the point.
• Your use of markdown is good enough, but still needs improvement.
• You have answered the questions in your own words, and Images are well sourced.
• It was easy understanding your points, you wrote with simple terms and I like that.
Thank you for participating in the intermediate class. I look forward to continue grading your homework.
Thank you so much Prof. @venom-21. I hope to do better next time. Thank you for your continuous support.
Congratulations, your post has been upvoted by @r2cornell, which is the curating account for @R2cornell's Discord Community.
Thank you so much @r2cornell and @bestkizito