Emotions Vs. Logic Stock Market Trading.

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 Why do most of the traders fail to make money? Can a 12th pass candidate earns millions from the stock market...


 
Emotions play a very crucial role in trading in the stock market. I have observed that many times a well educated person (i.e. Technical Analyst) fails to make money and a common person who knows nothing about it but basics does wonder.

 How does it happen?

See, Stock Market is filled with the numerous of brains which comprises of several major emotions which every human being does carry i.e. Fear, Greed, Anger and Hope. And these emotions have no link with the education qualification of any person. A highly graduated masters degree holder or a normal graduated person both can have these emotions. Major winner will always be the person who will manage their emotions, not the one who is more qualified.

Briefly understand how the market works,
Whether you agree or not but it is true, Market is moved by market makers (20% people have large chunks of money) who have monopoly. They can move the price up or down as per their own will and interesting thing is that they don't trade themselves i.e they use algo systems to trade which has no emotions but only logic and that is "Buy Cheap Sell Dear".

Here are some emotions which I observed myself and by talking with different traders when they get success and failures in trades. Surely, it will help you to understand your emotions which can lead your trading better.  

Emotions And Trade 
1. Fear with greed ( LOSS ) - Fear of missing opportunity 
2. Fear with confidence. ( SUCCESS ) - Price showing exit but logics are still in favor.
*Confidence comes with logic.*
3. Hope with confidence. ( LOSS )- logically exit but there is a hope that price will go up.
4. Hope with fear. ( SUCCESS ) - No analysis but there is a hope that the price will go up still a fear.
5. Greed with hope. ( LOSS ) - No analysi but there is a greed that price will go up and hopping should go up.

Bonus Rule
Don't trade if you are forced to take trade. There will be a loss.

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