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Guide

Trading psychology: the mental traps that cost the most

Fear of missing out, loss aversion, overconfidence: how to spot them in your numbers and which rules defuse them.

The problem isn't knowing, it's doing

Almost every trader knows what they should do. The worst losses come when emotions take the place of the plan: an early entry, a moved stop, one more trade to win it back.

The most common traps

Fear of missing out (FOMO): you enter late, on a move that has already started, with a stop that's too wide. Loss aversion: you hold losers hoping they'll come back and close winners too early.

Overconfidence after a winning streak: you raise the size or loosen the rules just as the market changes. Revenge trading after a loss: you want the money back right away and multiply your mistakes.

Measuring emotions

Note your emotional state before each trade, in a single word: calm, tired, impatient, euphoric. After a few dozen trades compare the average result in R for each state: the numbers will tell you when not to trade.

Rules that protect you from yourself

A daily stop after a fixed number of losses, a maximum risk per trade, a mandatory checklist before entering and a break after every closed trade. Rules work if you write them when the market is closed and enforce them when it's open.

Put it into practice with TrackMyTrade: the journal that enforces your rules.

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Trading psychology: the mental traps that cost the most · TrackMyTrade