 Humans tend to bring their personal problems with them when they trade. That's why psychological factors affect trading decisions in a simple way. Some people decide that they actually need a system to trade the markets. But the failure to address their problems results in them just changing from bringing their problems to the market, to bringing their problems to the system.
May be the main psychological problem is the challenge of risk. And many traders face it. The reason of it is the risk that even the simple rule – cut losses and let benefits run, that cannot be cleaving to. A trader has a strong ultimatum to make money only. That's why, having difficulty handling risk, he will have difficulty accepting small losses. As the result, they have bigger losses as they were unable to manipulate small losses in the first place. As for taking benefits we may say the same. Being risk-unwilling, they would only take small benefits for fear of losing money, and end up missing out on the big benefits.
Then let's speak about the other factors. The next will be stress. And people who are under stress are unable to make decisions as the capacities of their minds are used up on being worried. That's why, they decide not to make decisions or revert to only the simple stuff. It means that there is an opportunity of making the wrong decisions, which are only the simple solutions that are rarely correct. They will tend to follow the direction where the general throng is heading since they do not want to decide. The tendency of arising of this also exists in trade losses.
Most of us have positive goals, and would want to work towards our positive goals. But unfortunately, there may be times when we encounter situations that cause our behavior to conflict with our initial goals or beliefs. The cause of loosing person's trade may be caused with a conflict in a person. So, if we unite these parts within us they will be in harmony with one another.
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