Glossary
Trading psychology
Trading psychology is the study and management of the mental states that drive trading decisions — fear, greed, overconfidence, FOMO, and tilt. Since most strategies fail in execution rather than design, managing these states is often the difference between a profitable system on paper and a profitable trader in practice.
The practical core of trading psychology is not eliminating emotion — impossible — but observing it. Traders who record their emotional state on every trade build a dataset connecting states of mind to outcomes, and that evidence changes behavior faster than willpower.
Common measurable patterns include revenge trading after losses, oversizing after winning streaks, hesitation after drawdowns, and boredom trades in quiet markets. Each has a P&L signature a journal can expose.
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