{"id":13612,"date":"2023-07-05T10:00:00","date_gmt":"2023-07-05T14:00:00","guid":{"rendered":"https:\/\/morpheustrading.com\/blog\/?p=13612"},"modified":"2023-07-05T10:00:04","modified_gmt":"2023-07-05T14:00:04","slug":"trading-psychology","status":"publish","type":"post","link":"https:\/\/morpheustrading.com\/blog\/trading-psychology\/","title":{"rendered":"Trading Psychology: 4 Dangerous Emotions Traders Must Avoid"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large is-style-default\"><img loading=\"lazy\" decoding=\"async\" width=\"718\" height=\"308\" src=\"https:\/\/new.morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/AdobeStock_453777578-718x308.jpeg\" alt=\"trading psychology\" class=\"wp-image-13856\" title=\"trading psychology tips\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/AdobeStock_453777578-718x308.jpeg 718w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/AdobeStock_453777578-110x47.jpeg 110w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/AdobeStock_453777578-768x329.jpeg 768w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/AdobeStock_453777578-1536x658.jpeg 1536w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/AdobeStock_453777578-2048x878.jpeg 2048w\" sizes=\"auto, (max-width: 718px) 100vw, 718px\" \/><\/figure>\n\n\n\n<h1 class=\"wp-block-heading\">Learning how to master your trading psychology is a key step to becoming a winning trader. Here are 4 dangerous emotions holding you back from trading success.<\/h1>\n\n\n\n<p>When I was a naive, newbie trader, I didn&#8217;t pay much attention to my <a href=\"https:\/\/www.investopedia.com\/terms\/t\/trading-psychology.asp\" data-type=\"URL\" data-id=\"https:\/\/www.investopedia.com\/terms\/t\/trading-psychology.asp\" data-schema-attribute=\"about\" target=\"_blank\" rel=\"noopener\">trading psychology<\/a>. I was more focused on the technical chart patterns and trade setups.<\/p>\n\n\n\n<p>However, I soon found out the hard way that&#8230;<\/p>\n\n\n\n<p><strong><em>Ignoring the psychology of trading was destroying my trading results. <\/em><\/strong><\/p>\n\n\n\n<p>That&#8217;s when I began making a serious effort to master my personal trading psychology.<\/p>\n\n\n\n<p>I started reading <a href=\"https:\/\/www.amazon.com\/Market-Wizards-Interviews-Top-Traders-ebook\/dp\/B006X50OPW\" data-type=\"URL\" data-id=\"https:\/\/www.amazon.com\/Market-Wizards-Interviews-Top-Traders-ebook\/dp\/B006X50OPW\" data-schema-attribute=\"mentions\" target=\"_blank\" rel=\"noopener\">trading psychology books<\/a>, and even worked with a personal trading coach.<\/p>\n\n\n\n<p>I was definitely on the right path to mastering trading psychology, but<em> wished I would have started learning sooner<\/em>.<\/p>\n\n\n\n<p><strong>That\u2019s why NOW is the perfect time to start getting your trading psychology edge.<\/strong><\/p>\n\n\n\n<p><em>But why is it important to understand stock market psychology?<\/em><\/p>\n\n\n\n<p>Understanding stock market psychology paves the way for your long-term trading success.<\/p>\n\n\n\n<p>That&#8217;s why this exclusive new mini-lesson of top trading psychology tips is just for <em>you.<\/em><\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">TABLE OF CONTENTS<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/morpheustrading.com\/blog\/trading-psychology\/#How_do_you_develop_trading_psychology\" >How do you develop trading psychology?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/morpheustrading.com\/blog\/trading-psychology\/#4_Most_Dangerous_Emotions_to_Avoid_Fear_Greed_Hope_and_Regret\" >4 Most Dangerous Emotions to Avoid:  Fear, Greed, Hope, and Regret<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/morpheustrading.com\/blog\/trading-psychology\/#FEAR_%E2%80%93_The_most_powerful_human_emotion_that_affects_your_trading\" >FEAR &#8211; The most powerful human emotion that affects your trading<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/morpheustrading.com\/blog\/trading-psychology\/#FEAR_is_the_reason_markets_typically_fall_much_faster_than_they_rise\" >FEAR is the reason markets typically fall much faster than they rise.<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/morpheustrading.com\/blog\/trading-psychology\/#GREED_%E2%80%93_Too_much_greed_decreases_your_trading_profits\" >GREED &#8211; Too much greed decreases your trading profits<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/morpheustrading.com\/blog\/trading-psychology\/#HOPE_%E2%80%93_A_fake_friend_who_will_take_your_money_but_only_if_you_let_it\" >HOPE &#8211; A fake friend who will take your money (but only if you let it)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/morpheustrading.com\/blog\/trading-psychology\/#REGRET_%E2%80%93_Remember_the_next_opportunity_is_always_just_around_the_corner\" >REGRET &#8211; Remember the next opportunity is always just around the corner<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/morpheustrading.com\/blog\/trading-psychology\/#How_much_of_trading_is_psychological\" >How much of trading is psychological?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/morpheustrading.com\/blog\/trading-psychology\/#Action_plan_to_improve_your_trading_psychology\" >Action plan to improve your trading psychology<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_do_you_develop_trading_psychology\"><\/span>How do you develop trading psychology?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Some trading sites advise new stock and crypto traders to gain experience by paper trading with a simulated account.<\/p>\n\n\n\n<p>This can be helpful to learn the basics of trading, but it&#8217;s a much different ball game when real money is on the line.<\/p>\n\n\n\n<p><strong>Your true emotions in trading will only be revealed when risking your own money with actual trades.<\/strong><\/p>\n\n\n\n<p>Therefore, the best way to develop your trading psychology is simply by working your way through hundreds of live trades with real capital.<\/p>\n\n\n\n<p>Keep a basic journal and note when you feel the dangerous emotions below start creeping in.<\/p>\n\n\n\n<p>This is the only way to truly identify your personal strengths and weaknesses in trading psychology.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_Most_Dangerous_Emotions_to_Avoid_Fear_Greed_Hope_and_Regret\"><\/span>4 Most Dangerous Emotions to Avoid: <br \/><em>Fear, Greed, Hope, and Regret<\/em><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Investing decisions in<strong> <\/strong><em>any market in the world<\/em> are driven by 4 powerful emotions of Fear, Greed, Hope, and Regret.<\/p>\n\n\n\n<p>Left uncontrolled, these emotions can have a <strong>seriously negative impact on your trading account&#8212;<em>but only if you let them.<\/em><\/strong><\/p>\n\n\n\n<p><em>Your personal ability to master these key emotions directly determines your long-term trading success.<\/em><\/p>\n\n\n\n<p>So here&#8217;s a quick rundown of how fear, greed, hope, and regret can harm your trading results.<\/p>\n\n\n\n<p>Most importantly,  I have also included <strong>actionable ways to avoid these emotions<\/strong> in your trading.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"718\" height=\"479\" src=\"https:\/\/new.morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/4-dangerous-emotions-for-traders-718x479.jpeg\" alt=\"\" class=\"wp-image-13870\" title=\"\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/4-dangerous-emotions-for-traders-718x479.jpeg 718w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/4-dangerous-emotions-for-traders-110x73.jpeg 110w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/4-dangerous-emotions-for-traders-768x512.jpeg 768w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/4-dangerous-emotions-for-traders-1536x1024.jpeg 1536w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/4-dangerous-emotions-for-traders-2048x1365.jpeg 2048w\" sizes=\"auto, (max-width: 718px) 100vw, 718px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FEAR_%E2%80%93_The_most_powerful_human_emotion_that_affects_your_trading\"><\/span>FEAR &#8211; The most powerful human emotion that affects your trading<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><em>Fear<\/em>&nbsp;is a distressing emotion caused by a feeling of impending danger.<\/p>\n\n\n\n<p>This results in a survival response, <em>regardless of whether the threat is real or imagined.<\/em><\/p>\n\n\n\n<p>Traders consistently report fear as the emotion they struggle with the most. Fear has even caused people to jump off buildings during market panics.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FEAR_is_the_reason_markets_typically_fall_much_faster_than_they_rise\"><\/span>FEAR is the reason markets typically fall much faster than they rise.<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>It took the Dow Jones Industrial Average 24 years (1983 until 2007) to rally from 1,000 to 14,200&#8230;BUT it only took 2 years (2007-2009) to lose <em>HALF<\/em> of that multi-decade gain.<\/p>\n\n\n\n<p>Why?<\/p>\n\n\n\n<p><em>Uncontrolled fear rapidly leads to panic<\/em>&#8212;<em>which leads to poor decision making in the markets.<\/em><\/p>\n\n\n\n<p><strong>When traders become driven by panic, they often sell their positions at any price.<\/strong> That&#8217;s why stocks frequently cliff dive when group fear starts kicking in.<\/p>\n\n\n\n<p>Fear can also rear its ugly head after you experience a string of losing trades.  After suffering many losses, fear of &#8220;yet another loss&#8221; can make it mentally challenging to enter new <a href=\"https:\/\/https;\/\/morpheustrading.com\/services\/swing-trade-alerts\" data-type=\"URL\" data-id=\"https;\/\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noreferrer noopener\">swing trade setups<\/a>.<\/p>\n\n\n\n<p><strong>When paralyzed by fear, you miss out on profitable trading opportunities.<\/strong><\/p>\n\n\n\n<p>If it&#8217;s a quality trade setup, then don&#8217;t let fear prevent you from buying (be careful not to confuse this with revenge trading).<\/p>\n\n\n\n<p><strong>Remember that each trade you enter is completely independent of the previous trade. <\/strong><\/p>\n\n\n\n<p>Therefore, losing money on a prior trade does <em>not<\/em> necessarily mean you will lose on the next trade.<\/p>\n\n\n\n<p>Fear is not always bad, as it can help keep losses small.<\/p>\n\n\n\n<p>For example, fear of a bigger loss can get you out of a bad trade you should no longer be in.<\/p>\n\n\n\n<p>If you immediately sell your stock or crypto when it hits your preset stop price, then the fear of a bigger loss protects you from <em>major<\/em> losses.<\/p>\n\n\n\n<p><strong>When there is fear, steer clear!<\/strong><\/p>\n\n\n\n<p>If the market is in a state of panic, don&#8217;t fight the downtrend.<strong> <\/strong><em>If you&#8217;re in doubt, get out!<\/em><\/p>\n\n\n\n<p><strong>Don&#8217;t try to rationalize or come up with excuses <\/strong>to stay in losing positions beyond their stop prices.<\/p>\n\n\n\n<p><em>HINT: Ignore the news and internet forums to prevent lame rationalizations<\/em> <em>for staying in losing trades.<\/em><\/p>\n\n\n\n<p>When there is too much fear in the markets, our flagship <a href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noreferrer noopener\">swing trade alerts<\/a> service simply shifts to cash until a new buy signal is received. This prevents fighting strong downtrends in unfavorable conditions.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"718\" height=\"479\" src=\"https:\/\/new.morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/psychology-of-trading-718x479.jpeg\" alt=\"psychology of trading\" class=\"wp-image-13868\" title=\"psychology of trading\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/psychology-of-trading-718x479.jpeg 718w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/psychology-of-trading-110x73.jpeg 110w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/psychology-of-trading-768x512.jpeg 768w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/psychology-of-trading-1536x1024.jpeg 1536w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/psychology-of-trading-2048x1365.jpeg 2048w\" sizes=\"auto, (max-width: 718px) 100vw, 718px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"GREED_%E2%80%93_Too_much_greed_decreases_your_trading_profits\"><\/span>GREED &#8211; Too much greed decreases your trading profits<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><em>Greed<\/em> is an excessive desire for money and wealth, but is a natural human emotion.<\/p>\n\n\n\n<p>A <em>healthy<\/em> amount of greed can help drive your trading profits, but too much greed will have the opposite effect.<\/p>\n\n\n\n<p><strong>How to know when it&#8217;s too much greed<\/strong><\/p>\n\n\n\n<p>Greed is when you have already made a large profit on a trade, BUT are still obsessed with how much more you <em>could have <\/em>made if you stayed in the trade longer.<\/p>\n\n\n\n<p>The mistake with this reasoning is that <em>all gains are not real until the position is closed. <\/em>Until then, a winning trade is only a profit on paper.<\/p>\n\n\n\n<p>Greed can also cause traders to make bad trades by ignoring solid risk management rules, which signals a lack of discipline in your trading or investing.<\/p>\n\n\n\n<p><strong>To keep greed at bay on a winning trade, sell partial share size to lock in profits, then trail a stop higher on the rest.<\/strong><\/p>\n\n\n\n<p>Proactive trade management like this is why our exclusive <a href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" data-type=\"URL\" data-id=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noreferrer noopener\"><em>Wagner Daily<\/em> stock picks<\/a> have been consistently profitable over the past <em>20 years.<\/em><\/p>\n\n\n\n<p><iframe loading=\"lazy\" width=\"580\" height=\"680\" src=\"https:\/\/4966a6ff.sibforms.com\/serve\/MUIFAOyl4S5Qdajs7q3LemJKudDbMHB24p2SAorKuWWuauy3e1eFPtLgTh5BoPCh3XzIz3rZE_YyIqvc9IEl_xMkRg3MTlG0Zn5eqY3J2eKMjOE-jPuS43ZXewKssUaGt1kllR56wV2u1lBXoYfKSzEgeeTjLyjdSao87VmqsbDtgcy4jNwHMSzf0Rl346rIoBjtZwf-DX0V6tbn\" frameborder=\"0\" scrolling=\"auto\" allowfullscreen style=\"display: block;margin-left: auto;margin-right: auto;max-width: 100%;\"><\/iframe><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"HOPE_%E2%80%93_A_fake_friend_who_will_take_your_money_but_only_if_you_let_it\"><\/span>HOPE &#8211; A fake friend who will take your money (but only if you let it)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><em>Hope<\/em>, a feeling of anticipation and desire for a certain event to happen, may be the most dangerous emotion for traders.<\/p>\n\n\n\n<p>If you are an active trader or investor, <em>the feeling of &#8220;hope&#8221; in your day to day trading activities must be avoided at all costs<\/em>.<\/p>\n\n\n\n<p><strong>Why is hope so dangerous for traders?<\/strong><\/p>\n\n\n\n<p>Hope may prevent you from immediately selling a losing trade that hits its stop price&#8212;which is the top rule with most trading strategies.<\/p>\n\n\n\n<p>When you blow a stop, you will usually wind up with a much bigger loss than you planned to risk.<\/p>\n\n\n\n<p>You <em>may<\/em> get lucky with a second chance to exit (especially in a forgiving bull market). However, this is definitely <em>not<\/em> a situation you want to be in.<\/p>\n\n\n\n<p>A weak stock typically continues much lower before bouncing, which is why <strong>you must always honor your stops.<\/strong><\/p>\n\n\n\n<p>Otherwise, that&#8217;s when hope can really sneak up on you! <\/p>\n\n\n\n<p>Hope will convince you to just &#8220;hang in there a little longer&#8221; because:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>&#8220;Big news is coming soon&#8221;<\/li>\n\n\n\n<li>&#8220;This stock will surely rally after their next earnings report&#8221;<\/li>\n\n\n\n<li>[Insert your favorite<strong> bullshit excuse<\/strong> here]<\/li>\n<\/ul>\n\n\n\n<p>Meanwhile, while you&#8217;re busy hoping, the price plummets and has a<em> catastrophic effect<\/em> on your entire trading account.<\/p>\n\n\n\n<p><strong>Rest assured, the market will eventually punish you by taking your money when you slip into &#8220;hope mode.&#8221;<\/strong><\/p>\n\n\n\n<p>But the good news is that <em>YOU alone can easily prevent this scenario from happening.<\/em><\/p>\n\n\n\n<p><strong>Simply always set protective stops to pre-define your maximum risk per trade.<\/strong><\/p>\n\n\n\n<p>Be rigidly disciplined to follow your trading plan, and hope will <em>never<\/em> become an issue in your trading.<\/p>\n\n\n\n<p><em>Plan your trades, and trade your plan.<\/em><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"718\" height=\"519\" src=\"https:\/\/new.morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/regret-1-718x519.jpeg\" alt=\"regret in trading decisions\" class=\"wp-image-13874\" title=\"trading regret\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/regret-1-718x519.jpeg 718w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/regret-1-110x80.jpeg 110w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/regret-1-768x556.jpeg 768w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/regret-1-1536x1111.jpeg 1536w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/regret-1-2048x1482.jpeg 2048w\" sizes=\"auto, (max-width: 718px) 100vw, 718px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"REGRET_%E2%80%93_Remember_the_next_opportunity_is_always_just_around_the_corner\"><\/span>REGRET &#8211; Remember the next opportunity is always just around the corner<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Regret is defined as a feeling of sadness or disappointment over something that has happened&#8212;<em>especially<\/em> when it involves a loss or a missed opportunity.<\/p>\n\n\n\n<p>It is only natural for a stock trader to regret entering a losing trade <em>or<\/em> missing out on a winning trade. <\/p>\n\n\n\n<p>But to master your trading psychology, do <em>not<\/em> hyper-focus on losing trades or missed opportunities. <\/p>\n\n\n\n<p>If you lose money on a trade, then simply evaluate what went wrong, learn from it, and move on. <\/p>\n\n\n\n<p>Don&#8217;t waste time regretting your original decision to enter the trade. What&#8217;s done is done.<\/p>\n\n\n\n<p>Conversely, you may feel regret when you miss an opportunity. This is human nature.<\/p>\n\n\n\n<p>However, you must train your mind to simply move on to the next trading opportunity&#8212;<em>which is always just around the corner.<\/em><\/p>\n\n\n\n<p>When you allow this type of regret to control you, it becomes too easy to &#8220;chase trades&#8221; with risky entry prices. <\/p>\n\n\n\n<p>If you chase, your&nbsp;risk\/reward ratio of the setup no longer meets the parameters of healthy trade management. <\/p>\n\n\n\n<p>Let&#8217;s say you plan to buy $DUDE stock at a $60 buy trigger price, with a swing trade target around $70. If you buy it, you plan your initial stop at $55. <\/p>\n\n\n\n<p>This gives you a 1:2 risk\/reward ratio (risking $5 to gain $10).<\/p>\n\n\n\n<p>$DUDE stock rallies, but you miss your original $60 buy and instead chase the price to an entry at $65.<\/p>\n\n\n\n<p>If you don&#8217;t significantly raise your initial stop, you now have a <em>negative<\/em> risk-reward (risking $10 to gain $5).<\/p>\n\n\n\n<p>In this case, your regret of missing the $60 entry caused you to chase it to $65 (<em>next time, just wait for a pullback<\/em>). Avoid feelings of regret to <strong>ensure the math of trading is always in your favor.<\/strong><\/p>\n\n\n\n<p>We always target a <em>bare minimum<\/em> risk\/reward ratio of 1:2 for swing trades in our <a href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" data-type=\"URL\" data-id=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noreferrer noopener\">stock alerts<\/a> and <a href=\"https:\/\/morpheustrading.com\/services\/crypto-picks\" data-type=\"URL\" data-id=\"https:\/\/morpheustrading.com\/services\/crypto-picks\" target=\"_blank\" rel=\"noreferrer noopener\">crypto alerts<\/a> services.<\/p>\n\n\n\n<p><em>Successful traders keep their minds disciplined to avoid remorseful thinking.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_much_of_trading_is_psychological\"><\/span>How much of trading is psychological?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Any individual emotion above can negatively affect your trading performance&#8212;<em>but only if you let it<\/em>.<\/p>\n\n\n\n<p>One way to maintain a healthy trading psychology is to <strong>understand market cycles that predict exactly when fear, greed, hope, and regret may arise.<\/strong><\/p>\n\n\n\n<p>Fortunately, human psychology is quite predictable <em>and<\/em> hasn&#8217;t changed much in thousands of years. As such, any financial market in the world follows the same cycle of emotions.<\/p>\n\n\n\n<p>This predictability of <strong>human behavior in the stock market creates a roller coaster cycle that continually repeats<\/strong>.<\/p>\n\n\n\n<p>Take a few moments to study the chart below and you&#8217;ll see what I mean:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"718\" height=\"355\" src=\"https:\/\/new.morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/market-emotions-718x355.jpeg\" alt=\"market cycle of emotions\" class=\"wp-image-13864\" title=\"market cycle of emotions\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/market-emotions-718x355.jpeg 718w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/market-emotions-110x54.jpeg 110w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/market-emotions-768x380.jpeg 768w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/market-emotions-1536x760.jpeg 1536w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2022\/10\/market-emotions-2048x1013.jpeg 2048w\" sizes=\"auto, (max-width: 718px) 100vw, 718px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Action_plan_to_improve_your_trading_psychology\"><\/span>Action plan to improve your trading psychology<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>When you feel <strong>fear<\/strong> may be getting the best of you, it&#8217;s crucial to immediately take some time away from the market (set stops first). Don&#8217;t risk your hard-earned money when your trading decisions are driven by fear.<\/p>\n\n\n\n<p>Keep<strong> greed<\/strong> in the backseat by locking in partial profits of <a href=\"\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noreferrer noopener\">winning stock trades<\/a> along the way. Never let greed be the reason that a big winning trade turns into a loser. <\/p>\n\n\n\n<p>Stay disciplined by ALWAYS following your trading plan to keep losses within acceptable limits. By honoring your stops, you don&#8217;t need to worry about<strong> hope<\/strong> (your imaginary friend) tricking you into stupid rationalizations.<\/p>\n\n\n\n<p>Every swing trader <em>hopes<\/em> that a losing trade will somehow become a winning trade, but<strong> stock markets are not a charity. <\/strong>Remember that any market is a <em>group<\/em>, which could not care less about what you as an <em>individual<\/em> &#8220;hope&#8221; for.<\/p>\n\n\n\n<p>Avoid <strong>regret<em> <\/em><\/strong>in your trading by having a &#8220;no chase&#8221; rule.  The temptation to chase goes away if you have a rule preventing it, and feelings of regret will quickly fade.<\/p>\n\n\n\n<p>Simply knowing these 4 emotions are always lurking in the dark is a <em>fantastic<\/em> first step to gain your trading psychology edge. <\/p>\n\n\n\n<p>Focus on trading psychology exercises to <a href=\"https:\/\/new.morpheustrading.com\/blog\/mastering-trading-psychology\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/new.morpheustrading.com\/blog\/mastering-trading-psychology\" rel=\"noreferrer noopener\">master your discipline<\/a> and ensure your best possible trading psychology.<\/p>\n\n\n\n<p>Above all, <strong>slow down and trade with a clear head<\/strong>. Remember the markets will always be around to present you with the next opportunity.<\/p>\n\n\n\n<p>You&#8217;re now armed with powerful, actionable steps to improve your trading psychology&#8212;<em>the rest is up to YOU!<\/em><\/p>\n\n\n\n<p>Yours in success,<\/p>\n\n\n\n<p>Deron Wagner, PhD (h.c.)<br \/>founder | <a href=\"https:\/\/morpheustrading.com\" data-type=\"URL\" data-id=\"https:\/\/morpheustrading.com\">MorpheusTrading<\/a><\/p>\n\n\n\n<p class=\"has-luminous-vivid-amber-background-color has-background\"><strong>Ready to take your trading to the next level?<\/strong><br \/><br \/>Fast track your trading psychology with<strong> <em><a href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noreferrer noopener\">The Wagner Daily<\/a><\/em>, <\/strong>our flagship service that provides you with explosive stock picks and educational chatroom based on our proven, rule-based trading system.<br \/><br \/>We have helped more than <em>70,000 traders since 200<\/em>2. Here&#8217;s what long-time member Stacy R. has to say:<br \/><br \/><em>&#8220;The Morpheus Team has taught me to not stray away from my discipline. Also, keeping losses small and proper position sizing is key.&#8221;<\/em><br \/><br \/><strong><a href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noreferrer noopener\">Learn more<\/a><\/strong> about how <em>The<\/em> <em>Wagner Daily<\/em> can help improve YOUR trading psychology too.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Learning how to master your trading psychology is a key step to becoming a winning trader. <\/p>\n<p>Here are 4 dangerous emotions holding you back from trading success.<\/p>\n","protected":false},"author":1,"featured_media":13852,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[772,3],"tags":[],"class_list":["post-13612","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto-trading-strategy","category-stock-trading-strategy"],"_links":{"self":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/13612","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/comments?post=13612"}],"version-history":[{"count":42,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/13612\/revisions"}],"predecessor-version":[{"id":19650,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/13612\/revisions\/19650"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/media\/13852"}],"wp:attachment":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/media?parent=13612"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/categories?post=13612"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/tags?post=13612"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}