In a world where people are walking away from nine-to-five jobs, financial trading is thriving more than ever, much in part due to the success of the internet. More and more people are getting into financial trading and making millions on the stock market. However, not everyone in the business is making money. You might sell at one time but suddenly start losing money. Stock Market consultant and Forex trader Anmol Singh says that psychological and behavioral issues are some of the most common reasons why people struggle to make money in financial trading.
Singh is the Founder and CEO of Live Traders, a firm that has just been voted the #1Trading Education Firm for the third year in a row since it was started in 2015. He has coached and trained over 1000 traders and investors. Singh has helped thousands of traders around the world deal with psychological and behavioral issues that arise when high stakes are involved. That has established him as a thought leader in the trading psychology space. So, what psychological and behavioral issues might be preventing you from making money when you trade?
Fear
When it comes to trading in the stock market, the situation calls for the trader to be calm in order to make sound decisions. There is money to be lost so you cannot afford a mistake of any kind. Negative feelings like fear can come in the way of making million-dollar decisions. Consequently, you cannot let emotions influence or control your thought process. If you have fear of making a trade that you should be taking, you stand to lose out on a lot of money. Emotions should play no part in making trading decisions; every decision should be well thought about before acted upon.
Greed
Greed is another reason many traders lose money more times than they make. Similarly to gambling, you cannot be greedy, especially if you have been on a winning or losing streak. If you have been losing in your dealings, it is advised that you count your losses and move on. Some traders make the mistake of hanging on to hope. In some situations, hope is good, but not this one. Any kind of hoping in this industry will only put you in a position to lose more than you anticipated. Do not let greed lead you to your own destruction.
Taking more risk than is necessary can also be associated with greed. Financial trading can become as addictive as smoking a cigarette. The act of taking the risk of losing money leads to the secretion of two hormones, dopamine and serotonin. These two hormones are responsible for eliminating stress and can be quite pleasant and addictive. This is the same feeling associated with gambling. That means that to succeed in trading, you need a lot of control and discipline. You don’t want to put more money than you need to at risk. In case you lose, take a loss and live to trade another day.
Follow the Game Plan
Financial trading is a job that comes with a lot of perks. One of them is freedom. With most other jobs you have a boss breathing down your neck to be productive. With trading, you make all the decisions. You call all the shots, which is good, but it can turn into something negative when not used properly. Sometimes you might be tempted to make poor decisions because there is nobody to hold you responsible for your actions. As mentioned earlier, trading requires a lot of self-discipline. You cannot make it in trading without working out a game plan.
Remember you are your own boss. That means any form of evaluation must be done by you for yourself. You must run supervision on whatever you do to make sure that you stick to the plan.
If you can’t work out what is making you lose money instead of making more, never shy from asking for help from trading experts. Through his firm, Anmol Singh provides coaching, education and training to those looking to start their career in trading or trading on the side for passive income. He and his team also host live events, online courses, and advisory services and subscription products.
