The Effect of Greed on Trading

Greed is a natural human emotion that affects individuals on various levels. Worse, when viewed in a trading context, this trait often proves to be a hindrance rather than a help to a trader. Greed can easily make a good trade worse or even a bad one. This article provides a number of tips for controlling these psychological problems and how to stop them from interfering with a trader's trading success.

What Is Greed And How Does It Affect Trader Success?

Greed can be described as a strong desire for something and often manifests as a strong desire to be rich. These can easily spiral out of control when the market moves in the opposite direction but are equally likely to negatively influence trading decisions for profit trading.

Examples of greed when trading:

- 'Doubling' a losing trade

- Increase capital in profit positions

- Excessive leverage

Greed can change a trader's mental state, take advantage of the trader's focus to maximize utility/happiness/wealth. The desire for these things often causes traders to execute trades that the trader never thought of.

In addition, greed becomes a threat to trading accounts. Doubling, adding too much capital when a position wins, and excessive leverage can quickly result in a margin call or can drain account equity.

Greed will not have a good impact

Dealing with greed is not something that can be solved by just a few days. However, it must be done with personal awareness and understand that greed will have a negative impact, and continue to take positive steps with the main goal.

Trading with bad emotions in excess will have a bad impact on the results that will be obtained. Trading is patient and willing to accept the results obtained.


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