The obstacles of the day trader are:
Fear – Fear causes the day trader to hesitate and freeze when positions should be entered and exited. Fear can also cause day traders to take losses,
Doubt – Doubt causes great opportunity to be missed and causes a mind to be scattered and without firm direction.
Greed – Greed will cause day traders to hold onto positions too long often causing profit to turn into loss.
Hope – Hope will cloud the eyes of probability. Hope is not for day traders.
| Fear – Fear causes the day trader to hesitate and freeze when positions should be entered and exited. Fear can also cause day traders to take losses, Doubt – Doubt causes great opportunity to be missed and causes a mind to be scattered and without firm direction. Greed – Greed will cause day traders to hold onto positions too long often causing profit to turn into loss. Hope – Hope will cloud the eyes of probability. Hope is not for day traders. |
In trading psychology, two emotions that are constantly to the fore are hope and fear. One of the traders who recognised this was the legendary trader W D Gann.
“Hope and fear: I have written about this often in my books and I feel I cannot repeat it too often. The average person buys commodities because they hope they will go up, or because someone advises them, they will go up. This is the most dangerous thing to do, never trade on hope. Hope wrecks more people’s lives than anything else. Face the facts, and when you trade, trade on the facts, eliminating hope”
“Fear causes many losses. People sell out because they fear commodities are going lower, but they often wait until the decline has run its course and sell near the bottom – never make a trade on fear”
