Wednesday, March 7, 2012

types of trader emotional states and what to do about them


experiences and learning in stock market are unending.

recently i realised
that there are some select
repeated emotions
which repeatedly trap traders.

i have tried to identify some of them.

below, i sharing some of these emotional states
and will keep on identifying and sharing new ones
as and when i identify.

sometimes, these emotions are kicked itself
due to your own reasons.

but majority of the times
these are caused by the shepherd operators
in the trader sheep herds.

hope these are useful to you.

=====================================

emotion : hangover
what you feel = "bull or bear run will continue"
what you do = get complacent, lower your guard, ignore signals, take big positions at euphoria points
what you should do = be aware of the hangover. drink a lot of water.

emotion : hallucinations
what you feel = "start seeing the sunrise or sunset, not just imagining it, when none is there nor near"
what you do = take premature positions, keep holding on to these
what you should do = be aware of the hallucinations, stay awake, trust what you see, keep imagination under check. drink a lot of water

emotion : psychosis
what you feel = "this may be real but i don't like it. this may not be real but i like it. i want it and will have it. at all costs!"
what you do = you turn adamant and stick to losing positions or chicken out despite knowing all.
what you should do =  treat yourself of psychosis. drink a lot of water.

emotion : neurosis
what you feel = "this is not happening."
what you do = you don't believe what you see and pray that it changes.
what you should do = get treatment. drink a lot of water.

emotion : hypnotised, armaan, fools paradise, believe just because it is beautiful.
what you feel = "this is nice. this must be real."
what you do = get emotionally swept away. believe it just because it is beautiful. believe the fools paradise and not only fail to capitalise the fake opportunity but suffer in the end.
what you should do = don't believe everything that glitters, trust your head, don't put the cart before the horse, see the difference between a balloon and an aeroplane, use the rumours and false runs.

emotion : numbness
what you feel = don't feel anything. totally confused and lost.
what you do = don't act on losing positions, or jump in with eyes closed, or close winning positions.
what you should do = whenever feeling dizzy, stop the car, pull it aside and stay there till you regain consciousness. same about trading. don't try to be a bollywood hero. stepping out and being wise is no less heroism. come back to senses. drink a lot of water.

======================================

just identify your emotion and choose your course of action.
be your own psycho-analyst.

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