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Understanding Trading Psychology

The state of mind that a trader possesses matters a great deal in their output. Trading psychology is defined as the ability to control emotions, think fast, and exercise discipline.

  1. Analyzing fear: Whenever traders receive negative news regarding the economy in general, they are understandably anxious. They may panic and feel forced to liquidate their possessions and avoid more danger. Fear is a normal emotion and a possible menace, which traders must recognize and analyse. It is a danger to their earning potential.
  2. Keeping greed in check: Greed is a difficult foe to defeat. It’s usually motivated by a desire to perform greater, to obtain a bit extra. A trader should be able to detect this inclination and build a trading strategy that is focused on logic rather than impulses or urges.
  3. Quick decisions: Traders are frequently required to think quickly and make fast judgments. They’ll need a particular level of mental awareness to achieve this. They also require the willpower to adhere to their own trading strategies, and feelings must be avoided at all costs.
  4. Creating Guidelines: When mental pressure strikes, a trader could set rules and stick to them. Establish principles about when to enter and exit trades depending on your tolerance for risk. Set a profit goal and a stop loss to eliminate emotions from the equation.

Risk Warning

 This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. Trust Capital TC Ltd does not take into account your personal investment objectives or financial situation. Trust Capital TC Ltd makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast, or other information supplied by an employee of Trust Capital TC Ltd, a third party or otherwise.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77.78% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Trust Capital TC does not offer Contracts for Difference to residents of certain jurisdictions including the USA, Iran, and North Korea. Please consider our “Risk Disclosure“.