Stock Market Psychology: Key Things Every Trader Should Know

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Combining stock market psychology with a trading plan can help an investor or trader navigate in an uncertain landscape. Learn how managing emotions is key to stock trading.

Stock market psychology refers to the ability to identity and manage emotions and behaviors that may arise while trading. While the stock market is a forward-looking indicator for expectations around corporate earnings performance, it is often also swayed by factors which influence trading psychology on an individual and a collective level.in the stock market and to provide additional knowledge and tips on how this can be managed.

Emotions such as fear and greed can have negative effects by causing traders to act impulsively. An example of fear-based trading can be seen when a trader closes a position prematurely. Fear may also turn to greed when traders holds onto losing positions for a long period of time, fearful of realizing a loss.

 

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