Part 9/10:
The Harsh Truths of Trading Psychology
As one delves deeper into trading psychology, cognitive dissonance emerges as a critical concept. This psychological conflict arises when traders' beliefs contradict their actions. For instance, knowledge of the right strategy might clash with the impulse to close a trade prematurely.
The solution lies in discipline and adhering to a predetermined trading plan—documenting trades, setting limits, and maintaining emotional balance are paramount. A trading journal can help in this regard, serving as a tool for reflection and improvement.