We are waiting for difficult times, there is no doubt. While North Korea is advancing in the development of a nuclear and ballistic program, the international community is analyzing measures that can be taken to counter the threat and protect citizens of the whole world.
In times when the words “crisis” and “fear” became part of the daily vocabulary, psychological control and understanding of behavior become very important and useful tools for protecting a portfolio from uncertainty and even more, for making decisions that will benefit. And now, a list of 3 psychological traps that should be avoided right now.
1 – Focusing exclusively on numbers
Believe it or not, the psychological component of trading is equal to or even more important than numbers. Why? Because the numbers do not move by themselves, it is people and their decisions move them up and down. Decisions are based on various factors and emotions, such as fear, confidence, or surprise.
2 – Cheating Yourself
Once you wake up and close a great deal. You make a profit and feel great, like a Wolf of Wall Street or Gordon Gekko. We all had such a day and we know how nice it is. However, the next day everything happens exactly the opposite. And instead of blaming yourself for it, you blame the markets or the banks or something else. Losses should be perceived only as an opportunity to learn.
3 – History tends to repeat
Statistics, patterns, research … The past should be used to build a better future. However, one should not think that the coming months and years will be something that you have already seen before. The ups and downs, the bubbles, the inflation – all this was already true. However, the reasons behind this and how it affects people will always be different. And this should always be remembered before making a decision.