It isn’t just Emotions: How Thinking Affects Trading

Thinking affects trading, though we usually are not aware of it.

Traders focus on their emotions and try to bring them under control.  There’s no doubt that strong emotions like fear, greed anger and others can affect trading.  Emotions are a frequent culprit. But so are our thoughts.

We don’t usually think much about our thinking, but traders would be wise to explore this mental area in their own trading. Thinking–even completely normal thinking–can affect our trading.  And, because it’s thinking and we don’t think much about our thinking, much of the time these thinking errors go unnoticed.  Although thinking affects trading, we are largely unaware of how or when it is occurring. They are traders true mental blind spots.

Here is a video blog on Recency, one of the common thinking errors traders confront:

Recency Effect: Traders Mental Blind Spot

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