Emotional investing clouds judgement and forces your to make irrational decisions — things you would not have done in an objective and disciplined state of mind. We all have these feelings from time to time. Have a look a the list below and spot areas of improvement in your own trading.
You refresh your portfolio summary page every few minutes like you do your e-mail inbox.
You get excited when you get a big tip from someone on a stock you know nothing about.
You call your broker or mentor more than once a day to find out what is opinion is about your holdings.
You sell out your whole position when it gets downgraded by an analyst.
You want to sell out of your whole position every time the instrument slips just a few cents.
You start celebrating your profits when they are still unrealised gains.
You start contemplating what you are going to buy with those unrealised profits.
And you get annoyed at yourself when those unrealised gains diminish the next day.
While watching your real-time ticker you see your stock fall and ask yourself “why me?” over and over again.
You place minute/too small stop losses because you cannot bare ‘big’ losses, and then get stopped out too often.