Crowd and Human Psychology

Human Psychology

Human Psychology is to follow the crowd, and do as others do. However, in stock trading, if you listen to and follow the crowd at the wrong time, you will always lose in the long wrong.

Instead, stock market traders and investors make money by thinking independently and by being unique, not by acting on a hot tip from a neighbor or following collective behavior.

Money is made by developing your own ideas and following a method that is designed to fit you and your personality. Stock Market traders and investors make money by finding themselves, achieving their potential, and getting in tune with the stock market.

Investment success requires internal control more than other factor, This is the first step toward stock trading success. Those who dedicate themselves to developing that control are the ones who will ultimately succeed. That is what stock trading psychology is all about.

One of your primary tasks in beginning the search for the right stock trading system , is to find out enough about yourself so that you can design a system that will work for you. Getting in tune with yourself means finding an inner peace inside.

It means finding a balance between profits and losses. You will always have an external struggle in the markets and with systems until you master the internal struggle within yourself. This is the importance of human psychology.

In the book The Art Of Contrary Thinking, Author Humphrey B. Neill states:

"The ‘crowd' is most enthusiastic and optimistic when it should be cautious and prudent; and is most fearful when it should be bold."

By reading The Art Of Contrary Thinking, you'll understand human psychology and what contrary opinion is, how to apply it to the markets when investing, and how it can aid you in your critical thinking.

Measuring and evaluating the sentiment of the crowd is key to successful trading, because it is the crowd that has the greatest effect on the future price movement of the stock.

Meditation is a very common technique used to center and ground one's self.

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Fear and The Stock Market

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Fear Psychology

In the end, the difference between between the consistent winners and everyone else is simply this: The best stock market traders are not afraid.

The aren't afraid because they have developed attitudes that give that give them the greatest degree of mental flexibility to flow in and out of trades based on what the stock market is telling them about the possibilities from its perspective. They understand human psychology. And they understand that learning psychology is very important.

At the same time, the best stock traders have developed attitudes that prevent them from getting reckless. They understand human psychology and they have developed the proper stock trading psychology mindset.

95% of the trading errors you are likely to make - causing your money to just disappear before your eyes - will stem from your attitudes from the four primary trading fears:

1. Fear of being wrong

2. Fear of losing money

3. Fear of missing out

4. Fear of leaving money on the table

When you are fearful, no other possibilities exist. You can't perceive other possibilities or act on them properly. Fear is immobilizing. Physically, it causes us to freeze or run. Mentally, it causes us to narrow our focus of attention to the object of our fear.

This means that thoughts about other possibilities get blocked. You won't think about all the rational things you've learned about the stock market until you are no longer afraid and the event is over.

Then you will think to yourself; "I knew that. Why didn't I think of it then? or, "Why didn't I act on it then?"

We've all seen people who have gotten everything they've ever wanted... whether it's driving expensive cars, traveling the world or having fantastic relationships with their family and friends... the question is... how did they get this lifestyle?

It's simple... these people have discovered the techniques that allow them to achieve ALL their goals, and they challenged their fears.

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World renowned Personal Development Coach and Entrepreneur Brian Tracy has compiled these techniques into one easy-to-follow program called The Science of Self-Confidence.

Brian Tracy shows you how to: control your confidence level by controlling your thoughts ... stop self-defeating behaviors and begin self-confident ones ... see yourself as others see you and easily change their perceptions.

This fantastic program will teach you how to overcome your fears, create your goals, program yourself for success, take action now and have everything you have ever wanted.

Brian Tracy is one of the best psychology and wealth building Coaches there is, helping you understand the psychology of learning how to build wealth.

Learn More Here.

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You cannot design a stock trading system that is right for you unless you know something about yourself and have some understanding of human psychology. And you will NOT make money consistently if you are following other people's advice - be it the advice of stock brokers or of investment advisors.