Psychology
Mental aspects and behavioral patterns in trading.
Mental aspects and behavioral patterns in trading.
12 terms in this category
F
Fear and Greed Index
Fear and Greed Index measures market sentiment on a scale from extreme fear to extreme greed, used as a contrarian indicator for timing.
FOMO
Fear Of Missing Out (FOMO) is an emotional state that drives traders to enter positions impulsively when seeing others profit, often at unfavorable prices.
O
Overconfidence Bias
Overconfidence bias is an inflated belief in one's trading abilities, often leading to excessive risk-taking and underestimating potential losses.
Overtrading
Overtrading is excessive trading beyond what a strategy requires, often driven by boredom, FOMO, or the desire to recover losses.
R
Recency Bias
Recency bias is the tendency to overweight recent events when making decisions, causing traders to extrapolate short-term trends into the future.
Revenge Trading
Revenge trading is impulsive trading after a loss, attempting to recover money quickly through larger positions or more trades, usually resulting in bigger losses.
T
Tilt
Tilt is an emotional state where frustration or anger impairs trading judgment, leading to irrational decisions and deviation from the trading plan.
Trading Discipline
Trading discipline is the ability to consistently follow a trading plan and rules, managing emotions and avoiding impulsive decisions.