please explain Important tenants of trading psychology include preservation of i
ID: 2810819 • Letter: P
Question
please explain
Important tenants of trading psychology include preservation of investment capital, use of stop losses, attention to correct "position sizing" (i.e., not overweighting any one security relative to the portfolio), development of a rational trading strategy (criteria which has been back-tested to produce a suitable win-loss ratio) and adherence to one's trading discipline 1. How do these tenants align with the topics of behavioral finance? 2. Why is trading psychology so important? 3. Is a trading loss the important issue or is it whether or not the investor adhered to the trading discipline? 4. Are there other issues you might incorporate into your own trading psychology?Explanation / Answer
Answer1 )
The concept of trading psychology relates with the idea of behavioral finance, all the factors of trading are vary from person to person that is depend on the behaviour . The investors has different reservation about use of stop loss, position sizing by dint of access to same market informations.
Answer 2) The success in trading depend on knowledge and skills to real time performances , acess to market information as a core factor . By dint of same access to information to different investors return and process of trading varies from investor to investor due to the personal factor consider as Trading psychology concept .
Answer 3) Trading loss is one of the most important factors intrading , as every investor has different holding and bearing capacity for same investment. an investor should adhere the trading discipline but with priority to his/her own personal capabilities..
Answer 4) My trading psychology concept depend on ecognition of Pattern in trading methods.the recognition ability developed by high level of knowledge and skills.
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