Human emotions can be dangerous, when it comes to Trading

Stock market has two outcomes, either you make a profit or a loss. There is no in between, when it comes to trading of any sort for that matter, be it commodity, share market or forex.

In the simplest of understanding, the process of trading involves buying a stock at a certain price and selling it back to a certain price. Whatever the difference comes from that, decides whether you have made a profit or a loss.

“Win or Lose”

Then why is it so, that there is a 50-50 chance whether you win at trading or lose, as per the history of the stock market.

Actually, there are multiple factors affecting stock price, that decides whether it will go up or down.

Considering this, it is almost humanly impossible to take into the account of all the factors, while placing a trade,

But the most common and influential factor of all is the emotional state of a trader on a particular day, or any outside circumstances too for that matter.

Emotional Trading: Overpowering emotions drive your decision

Let’s consider a scenario where on a particular day, the overall market is performing well, and you are feeling confident to place a trade in a certain stock. As per the market conditions the stock is expected to rise up and your strategy is to sell the stock at a certain price.

Now, in spite of the market performing well, the stock you have placed a trade on is not moving an inch in the index. Remember we know that the stock price has multiple factors that affect its performance, right?

What will be the emotion you are experiencing right now? frustration, right?

“Flight or Fight response”

Now further in the scenario, the stock price is going downwards, and the emotions you are feeling is of panic and nervousness, and you decide to sell the stock at loss to stop further loss, because you cannot imagine more loss on your trade.

Automated Trading: : An Artificial Intelligence tool that uses computer programs to increase the probability of a stock, forex, or commodity trade.

This is when the role of Trading BOT comes into play. Majority of traders are using conventional methods to trade in the stock market depicted in the above scenario. And that is why the average return on investment (ROI) is 10% in any year, which is considered below average.

Now, the Trading BOT is an intelligent software that implements logic required to make decisions in critical situations to ensure profitable trade in the stock market. This trading is known as Auto Trade.

Forex Trader is a sophisticated software covering all the market conditions and scenarios which range in millions, which operates in the stock market only when the ideal conditions are met to buy or sell stock, ensuring maximum return on investment (ROI).

Obviously avoiding errors in decision making that arises due to human emotions is also the major benefit.