Finance

How Emotions Can Affect Trading in the Stock Market Today

            Over the last few years, the volatility of the economic markets has refueled the age old debate regarding how rational the behavior of the financial markets and investors are.<br />While theoretically, the best behavior for these markets would be to use cold calculations, emotions like fear, greed and uncertainty often play a less that negligent role in the real outcomes. <br /><br />Despite all logic, calculations and assessments done prior to an investment, human investors often find it very difficult to keep their emotions aside when investing in stock market today. Some people have managed to find a workaround by purely using software based trading systems that buy and sell stocks solely on technical aspects of the current situation, completely blocking out human emotions.<br /><br />Other, experienced traders, dictate to themselves very clear black and white rules for their investing and trading. Applying software based stop losses and stop gain orders helps confirm that these limitations will indeed be applied when the time comes.<br /><br />However, inexperienced traders may go into an investment or option trade with a certain goal or limit in mind, but when the time comes, they try to find some rationalization to hold the stock a little bit longer, or will jump the boat and sell the stock before the limit price that they sold, simply out of fear of losing more money, or losing any of the gains that they have already made.<br />
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