"Extreme Fear or Courage" is one of the negative trading psychology. Traders who do not have sufficient financial knowledge and experience; they are afraid if they are making a loss as a result of the trade positions they have opened. With this psychology, amateur traders close their positions where the price can find support and make a loss. Most traders describe this situation as: "I closed my position, prices started to rise!" Or, even though the price breaks the main support, they think that the prices will rise again, they add to their positions and maintain their current losing position. In this case, the loss of money of these people will be greater.
As another situation, if amateur traders make a profit in the trade positions they open, they gain self-confidence and courage. As a result, they open unnecessary additional trading positions and start to lose from these additional positions. After a while, as a result of these amateur traders losing money, the profit amounts are erased and the loss amounts increase.
In the financial markets, those who make losses due to negative trade psychologies are constantly losing money because they are not aware of this situation and do not have sufficient financial knowledge, technical equipment and experience. One of the most important parameters that will stop losing money in financial markets is "risk management".
To trade with real money in financial markets without knowing risk management, understanding the importance of risk-return ratio and without formal practical training on all these; results in money losses every time. It is necessary to be a professional in order to trade in the financial markets and make a profit. This job means investment specialist and trader profession. In this area, there is a lot of knowledge and concepts that need to be learned practically.
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