Many traders are not undone in their trading by their method or system. No, when the adrenaline starts pumping and the heart starts pounding bad decisions are made. Pride, Fear, Greed, and Hope are some of the most dangerous traders you will ever trade against.
These emotions scream at the trader:
“Don’t stop your loss! Prove you are right! It will come back, just wait.” -Pride
“Go take your profit quickly and let your winners run, we are afraid of a profit reversing and booking a loss.” -Fear
“This trade can’t miss, I am sure it will be a huge winner, I am betting my whole account!” -Greed
“I am not sure what a good entry is here so I am just going to buy this stock and hope it goes up.” -Hope
Below are some great videos about these emotions by Scott O’Neil. He is President of MarketSmith Incorporated, a stock research tool developed by a team of investment professionals at William O’Neil + Company, a Registered Investment Advisor for Institutional Money Managers providing equity market buy/sell recommendations and independent research. Scott is also a portfolio manager with O’Neil Data Systems, Inc. -Forbes