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Impulsive actions to avoid during trading

3 mins 22 Dec 2023 0 COMMENT

Do you ever find yourself in a store, thinking to yourself, "Those shoes would look awesome on me"? After all, the shoes took your breath away, and you must have them. I mean, its human tendency to give into your impulse, so you'll act on your impulses and buy them. You're holding the box, and you are walking home, and slowly you realize that you messed up. Because you just bought a pair of overpriced shoes at a time when you might want to cut back on your expenses. You could have made that purchase at a better time but instead made an impulsive decision, and now you are left with a sorry bank balance.

Your tendency to make these impulsive decisions depends on your personality and experience for the most part. After all, even if impulse is natural to humans, but how you curb your impulses is what matters. Some people do it for the immediate rush and don't really think about how the decision is going to affect them in the long term. Now, traders are humans too, right? Making impulsive trading decisions is just another common mistake that traders tend to make. Are you doing it too? Learning more about this mistake will help you avoid it in the future.

Remember, keeping your emotions in control plays a huge role in trading. Keeping your calm and trusting the process will help you in the long term. When people start losing, they lose control of their emotions and get agitated. An agitated mind makes bad decisions. If you feel agitated or tired, consider avoiding taking trading-related decisions. Use of impulsivity increases when you are tired as your psychological resources are lacking. The use of impulse also goes up when one isn't as experienced. Inexperienced traders usually tend to divert from the plan because they are uncertain. Having a detailed and specific plan that tells you when to enter and exit a trade keeps you from making the wrong move. Don't act on your first impressions and come up with an outline of a trading plan.

Also, remember to be patient for returns. Do not always expect quick returns and stay on track to execute your plan. And here is another common misconception; more trades get you more profits. This is not the case. Merely entering into more trades does not guarantee success. Make sure you are in the best state mentally before you go ahead and make trading decisions for optimal results.

So, guys, don't doubt yourself, fight the impulse, stick to the plan, and trust the process!