Impact of Personality Influences on Stock Trading
You may have read the notion that personality plays a role in how a person views the world in the sense of the “glass half-full, glass half-empty” saying. A pessimistic person has a tendency to think the market is heading lower while an optimistic person has a tendency to think the market is heading higher.
Assuming a person knows one’s own personality traits, that person would be well advised to indulge in behavioural modification – in essence suppressing or controlling that which will be harmful to stock trading actions. This is where discipline is needed to keep psychological (emotional) influences in check. Furthermore, conducting research and analysis is not only good preparation but also beneficial to impose objectivity into stock trading activities.
A person may not be able to change one’s personality and outlook, and a person is not able to control the stock market, but a person is able to control one’s reaction to the vagaries of stock market movements. For a long position, if the trader observes an up-trend, continue holding the position; for a down-trend, continue to be out of the stock; for a trend reversal, open or close the position as the case may be. By observe, I mean through the use of a trend following system.
Those that can control the stock market can skip the next sentence but do so at your own risk. For the rest of us, we must recognize our own personality traits, impose a methodology and system of trading, do our homework and preparation, acquire tools and resources, and proceed with objectivity and confidence.
More you might like
This article examines the continuing dilemma facing the stock trader: the tug-of-war between emotions and reasoning through technical analysis.
This article covers two approaches to dealing with candlestick technical analysis. The trader can learn the candlestick patterns, the situations in which they translate into trend reversals, and apply the analysis to trading decisions. Or the trader can use the assistance of software.
This article presents the notion of migrating from a long-term buy-and-hold investing strategy to a short-term profit-making trading style, capitalizing on the rise and drop of the stock price (following the trend and profiting on the cycles).
Buying and selling of private company shares in secondary market exchanges.
This article examines the elements of successful stock trading. A stock trading method to execute winning trades and to achieve trading success. A trend following system based on candlestick technical analysis.