The 4 Deadly Sins of Trading: Fear and Hope
This month I am focusing on what I call the 4 Deadly Sins of Trading – Fear, Hope, Greed, and Pride. I presented a brief overview on the topic last week, so today I’m going to dig deeper into fear and hope!
Let’s jump right into how you can recognize when these emotions are taking over, and how you can turn them to your advantage.
As a trader, I recognize my fear when a stock doesn’t behave as predicted. For example, on my current trade with Nike my predicted outcome has been greatly affected by what’s happening in China. The trade started 3 weeks ago when none of this noise was in the system. Regardless of the health of the stock, my fear is rising and I’m starting to feel like a branch caught in the current of a raging river!
With that said, I know that the China effect is temporary as it relates to my specific trades. So here’s how I get my arms around my fear and start moving in the right direction:
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