“Trading Psychology Matters”
1)Trading psychology is the emotional component of an investor's decision-making process which may help explain why some decisions appear more rational than others.
2)Trading psychology is characterized primarily as the influence of both greed and fear.
3)Greed drives decisions that appear to be too risky.
4)Fear drives decisions that appear to avoid risk and generate little return.
5)Behavioral finance has documented several psychological biases and errors involved when making trading or investment decisions.