THE PSYCHOLOGY OF RISK

Every trader faces four emotions that destroy accounts. Recognizing them is the first step to controlling them. 1. FEAR Symptoms: Hesitating to enter valid setups, closing winners too early, moving stops closer to entry Solution: Reduce risk to 1%, backtest your strategy to build confidence, trade on demo until consistent 2. GREED Symptoms: Taking subpar setups, increasing position size after wins, removing take profits hoping for bigger gains Solution: Stick to your plan, set automatic take profits, remember that consistent small wins beat occasional big wins 3. REVENGE Symptoms: Trading immediately after a loss with larger size, taking low-quality setups to make it back Solution: Implement the 3-trade loss rule, walk away after losses, remember that tomorrow is a new day 4. HOPE Symptoms: Moving stops further away, removing stops entirely, adding to losing positions Solution: Pre-define every exit before entry, treat stops as non-negotiable, accept that being wrong is part of trading These four emotions are why 90% of traders fail. Master them and you are already ahead of the majority.