Fear And Greed(3)

Fear and Trading


I admit to being greedy, to make those profits that seemed right there for the taking, yet I was fearful of losing my hard earned nest egg.

How do you make decisions when those decisions affect something you hold dearly?

Meaning, your money!


First, fear doesn't form in a vacuum.

It is a learned response.

In the case of market timing, when you have a buy or sell signal that goes bad, the regret and frustration can carry over into the NEXT buy or sell.

Or worse, the fear is so consuming, that you don't even enter your next trade.

Of course, Murphy's Law dictates that the buy or sell you don't enter is the one you should have entered, which only compounds the fear and frustration.


This particular problem is made much worse if you enter every buy or sell with the "expectation" that it should be profitable.


If you believe that, then here is an important piece of information for you - "not every buy or sell will be profitable!"



By Frank Kollar