Are Retail Traders Prepared for Fast Moving Markets? | Finance Magnates

Success or failure depends on how one can control or manage their trading emotions. An individual’s mental state and feelings influence their decision-making, particularly when a new trader needs to keep calm for consistent trading. In this piece, we will discuss the day trading psychology’s importance for experienced and beginner traders. Moreover, we will discuss some points on how to deal without emotions.

Importance of Controlling Emotions

We cannot overstate the importance of controlling day-trading emotions. Imagine that ahead of NFP(Non-Farm Payrolls), you started to trade with the profit expectation that forecasts will less than the reported number. However, one may expect a hefty short-term profit if the price of EUR/USD increases quickly.

NFP comes, and as per the expectations, the forecasts are less than the reported data. But the price goes down for some uncertain reasons. According to all the analysis, the dealer started to think that all the EUR/USD should go up, and again the price falls.

As per the analysis, the losing position causes mental stress, and the emotions begin to flow over the reality called the “Flight or Fight” instinct. Unfortunately, these passions often act as a hinder on the way to accomplish the transacting goals. The traders often face this problematic issue, and this led to knee-jerk reactions. To avoid such complex problems, read more about the trading industry. The more you learn, the better you will become in the trade execution process.

Professional traders avoid the chance of making rash decisions because they know that their sudden decision can damage their accounts. In addition, they want to save their entire career from the knee-jerk reaction. However, avoiding this knee-jerk reaction is not easy at all. It requires many trades and many practices, and after that, one will be able to minimize transaction excitement.

Most common emotional factors

Nervousness, fear, excitement, conviction, greed, and overconfidence are the most common emotions that some traders experience. Let’s learn more about these factors so that we can prepare ourselves properly.


Working with trading lots that are too large is a common cause of fear. Improperly sized trading leads to unnecessary volatility, and one can make mistakes because of this volatility. On the other hand, extensive dealing associated with huge risks and stress, and usually, traders avoid making mistakes if they are not under pressure.

Sudden loss from a certain trade is another scenario that creates fear or nervousness, and the trader may start to think that their trading plan does not fit for them. So, always trade with a strong risk management plan so that you don’t have to deal with stress due to a sudden loss.


The key emotions are excitement and conviction, which one may want to feed off of, and the trader has this feeling at the start of every transaction. Any good trade’s final piece is conviction, and if you miss the excitement, there is a chance at which you cannot participate in the right business.

Right means the negotiating plan is working on your trade, and you are dealing with the right business. Sometimes the reverse might happen, and at the reverse point, the terrible trades can win, and good trades may lose or fall. Doing good work is the only thing that can keep you winning or losing in this business.


Once you win a trade, you could become greedy and may want to make more profit. You may do well at some point because of greed, but you may slip and fall in a drawdown if you are not careful.

Be sure that proper rules are used in the trade execution process, such as targets, sticking to stops, good trade setups, and good management of risks. A strong running of a business may stop because of overconfidence. Moreover, overconfidence may result in a sloppy trade-off.

The financial marketsgave birth to proverb that the plan failing means a failed trade, out of the idea that taking a planned approach to trading yields negative results. Always try to stick to your plan.