Good emotional management is the key to becoming a good investor. Not only does it require knowledge of economics and markets, but also gaining experience, managing risk, knowing why you are investing, when to buy an action and what is its most profitable value, among other aspects. However, despite having the theoretical and practical knowledge that is needed for this, emotions control the result you can obtain and play a trick on yourself.
Poor management of emotions in the field of stock trading can hurt us. For this reason there is psychotrading, a discipline that combines psychology, economics and the world of finance, helping to understand how our emotional facet influences the sale of stocks, currencies and other assets.
Psychotrading or trading psychology can be defined as the control of emotions when operating in trading and carrying out stock transactions. Basically, it is the application of a good emotional intelligence in the world of the stock market and financial markets. For this, it is essential to have a good, consistent trading plan, and adhere to it rigorously from the first moment, avoiding that emotions, instincts and pressure cloud our judgment.
Any action that involves the use of money must be operated with discipline and reflexivity. It is logical that it is a bit flexible, since there are many times when we are presented with opportunities that we cannot ignore, however, we cannot allow what our heart tells us to take the helm of our economic decisions instead of having cold and calm mind, thinking meticulously and thoughtfully what to do with our money.
As traders we must be humble , you should not build castles in the air thinking that you are going to earn a fortune since there is nothing certain in this life. We have to disconnect from everything what is related to trading, because being obsessed will make us lose control, make risky and ill-considered decisions. Maintaining the routine, discipline and constancy in the trading strategy when operating, allows to avoid scares and uncomfortable situations.
And emotional intelligence is the control tool that guarantees success in trading!