Case Study: How Emotion affect Trading

Trading is Buying and selling securities or commodities on a short-term basis, hoping to make quick profits.You might hear of rags to riches stories or traders boasting about the money they made in a trade. Its am exciting business but the fact is only 5% of traders are able to make money on a consistent basis.If you have ever interacted with  Successful traders he would say  that psychology and emotions are 80% of the battle.
Do not overestimate your ability to be unaffected by emotion.
Real Life vs. the Trading Terminal
Have you ever imagined why doctors,engineers, and maths graduate who are quiet strong in analytical skills  have burnt hands in trading ?
The pressure and stress you’ll face will be far greater than anything you’ve ever experienced.
When I first started trading, I was confident of my math and analytical skills – so I thought I could base all my trading decisions purely on analysis, unaffected by emotion.
Nothing could be further from the truth – to see why, let’s walk through the emotions of a trade.
Trading Highs and Lows
To simplify the matter lets illustrate the trading emotion using an Intraday Trades,similar emotions can occur over Swing trades and positional trades ranging for weeks or even months.
9:15 AM: You watch as the market opens. You are looking for a good buy entry point into LUPIN based on your analysis you think that LUPIN has given a breakout above 1838 and you are waiting for the confirmation signal during market hours to take the trade.
10:30 AM: LUPIN inches upward till 1844  for an hour from you entry price ie.1838,you are waiting for pullback near your buying point to take trade.

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