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 fear and greed look like in the stock market trading field?
You have been following a certain stock for a period of time now. It is advancing in price, so you decide to buy. You bought at a low price and now it is to higher price as you expected it would.
Now your greed pops up to the scene and convince you that this security is heading up like a rocket. So you are motivated to buy more of the stock, another possibility is that your stock is advancing higher and reaches beyond the selling price that you have planned to sell for. Now greed makes you believe that the stock will continue in an uptrend till the next day and so you hold on to it.
When securities move in an uptrend, greed from all who participate in the market adds to the uptrend.
Securities prices in most situations plummet quicker than go up and when this happen fear steps up.
Let us analyze the example above, where your stock moved beyond your exit price and you held on because you were on the side of greed. The next morning the stock price went down. The stock is being under heavy selling pressure, but you would not sell because greed is convincing you that higher prices would come back. While you are holding on, the price keep going down and now fear is popping up, but it is too late, now you have looses not profits.
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. - 23212
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 fear and greed look like in the stock market trading field?
You have been following a certain stock for a period of time now. It is advancing in price, so you decide to buy. You bought at a low price and now it is to higher price as you expected it would.
Now your greed pops up to the scene and convince you that this security is heading up like a rocket. So you are motivated to buy more of the stock, another possibility is that your stock is advancing higher and reaches beyond the selling price that you have planned to sell for. Now greed makes you believe that the stock will continue in an uptrend till the next day and so you hold on to it.
When securities move in an uptrend, greed from all who participate in the market adds to the uptrend.
Securities prices in most situations plummet quicker than go up and when this happen fear steps up.
Let us analyze the example above, where your stock moved beyond your exit price and you held on because you were on the side of greed. The next morning the stock price went down. The stock is being under heavy selling pressure, but you would not sell because greed is convincing you that higher prices would come back. While you are holding on, the price keep going down and now fear is popping up, but it is too late, now you have looses not profits.
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. - 23212
About the Author:
Want to find out more about stock trading on the internet, then visit Leyla Maker's site on how to trade stocks online for your needs.
posted by X - Men @ 8:42 AM
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