📕
A Trader Life Blog
  • Journey of a trader
  • Financial Markets
    • Financial Markets
      • Definition
      • Bonds
      • Crypto
      • Commodities
      • Futures
      • Forex
      • Stock market
    • Players
    • Tools
      • Overview
      • Technical analysis
      • Fundamental Analysis
  • TRADING STRATEGIES
    • Description
    • Binary options trading
      • Overview
      • Types of binary options trades
      • More details
      • Binary options trading strategies
        • Multiple bars High or low Binary Options Strategy
      • Glossary
    • Candlesticks
      • Candlesticks description
    • Chart patterns
      • Chart patterns description
    • Forex Scalping
      • Scalping description
    • Support and resistence
      • Support and Resistence description
    • Trend Following
      • Trend following description
  • Ideas
    • Options ideas
    • Commodities ideas
    • Crypto ideas
      • Sells Walls: You know know what these are and how to spot them.
      • New to crypto? Check this top 10 Crypto pairs list PRO and CON before you get in
      • How to consistently make returns with DCA
      • Three simple tools that can help you know the state of the bullrun
      • ATTENTION NEW TO CRYPTO PEOPLE
      • Stable coins
      • Practical Guide to Making and Taking Profits in Crypto
      • 50 Crypto Trading and Investing lessons
      • Red flags of crypto
      • TOP 50 crypto coins
    • Forex ideas
      • New to Forex? Then read this
      • Currencies PRO and CON
    • Stock market ideas
  • Education
  • Books
    • Technical analysis books
    • Stock market and finance
    • Psychology books
  • Extras
    • Page 1
    • THIS IS EXACTLY WHAT IT MEANS when someone says TO DO YOUR OWN RESEARCH (DYOR)
    • A one sentence summary of all the most popular scams so you know what to look out for.
    • Rules for success
    • 5 fundamental truths for trading
    • How to create a trading strategy
    • Components of an efficient strategy
    • Types of trading orders
    • Crypto slangs
    • Correlation of Cryptocurrencies
    • Central Bank Digital Currencies
  • Psychology of trading
    • Skill vs Luck
    • A list of dont's
    • How to know you are good trader
    • ZEN Trading
    • Types of traders
    • First steps
    • Pay yourself first
    • 90-90-90 Rule
    • 10 more things to know
    • Emotional states of a trader
    • Golden rule of trading
    • When can I become a full time trader?
    • How to lose your money with 10 simple steps :)
    • Old Rules...but Very Good Rules
  • Risk management
    • Overview
    • Risk to reward calculation
    • Gains needed to recover from loss
    • Practical example
    • Money management
    • Money management v2
  • Fundamental analysis
    • How to do properly a crypto research
    • APR vs APY
    • Major fundamental news
    • Value investing
    • Interest rates
    • Essential features of ETF's
    • Fundamentals Chart
  • Technical Analysis
    • Types of market days
    • First steps
    • Advanced candlestick Patterns
    • Price channels
    • Key patterns of price action
    • Elliott wave cheat sheet
    • Trading patterns cheat sheet
    • The topics to study to become an expert in technical analysis
    • How to use Volume & Open Interest data as secondary indicators
  • Courses
    • Untitled
Powered by GitBook
On this page

Was this helpful?

  1. Psychology of trading

Emotional states of a trader

Previous10 more things to knowNextGolden rule of trading

Last updated 3 years ago

Was this helpful?

1.OPTIMISM. It all starts with a positive outlook on the market situation, which leads the trader to open a trade. The trader is looking forward to future success.

2.EXCITATION. The market starts moving in the predicted direction. The trader anticipates events and hopes that success is assured.

3.TREMBLING. The market continues to move in the direction the trader needs, this is a moment of joyful fading. At this stage, the trader is completely confident in his trading system.

4.EUPHORIA. The point of maximum financial risk. Investments turn into quick and easy profit. The trader completely ignores the risk.

5.ANXIETY. Oh no, the market is turning! The first signs of movement not in favor of the trader appear. But he does not notice this and believes that the market will recover and the trend will continue.

6.NEGATION. The expected market recovery did not happen. The trader does not accept what is happening and remains in the position.

7.FEAR. Reality dictates its own rules, and the trader begins to realize that he is not as smart as he previously thought. Instead of confidence in success, thoughts begin to get confused.

8.DESPAIR. At this point, all profits are lost. The trader had a chance to take profit, but he missed it. Not knowing how to proceed further, he is trying to do everything to return at least to the break-even point.

9.PANIC. The most emotional period. At this stage, the trader feels his ignorance and helplessness and is completely at the mercy of the market. The mind is paralyzed, which sometimes leads to meaningless actions in the market.

10.SURRENDER. The trader has reached the limit of patience and closes the position in order not to increase losses anymore.

11.DESPODENCY. After exiting the market, the trader no longer has the slightest desire to conclude deals.

12.DEPRESSION. The trader begins to blame himself for stupidity, for why he did not close the deal on time. Some choose the right path and begin to analyze what went wrong. True traders are born at this stage, studying past mistakes and drawing conclusions.

13.HOPE. “I can still do it!” Eventually, the trader returns to the realization that there are indeed cycles in the market. He begins to analyze new possibilities.

14.FAITH. At this stage, the trader regains faith in his future in the market and starts trading again.