Feel Good Financing: How Emotions Affect the Market

Thomas Yin

The art of day trading is a fickle one; more often than not, it's a gamble for most especially given the intensive studies one must conduct to properly ensure that their trade decisions are well informed and sound. The reward, at times, may not even seem worth the risks taken. However, Thomas Yin, a successful trader himself, has developed a methodology that includes another perhaps less considered pillar in the trading field.

He refers to this pillar as 'Trade Psychology,' the idea behind how emotions drive change in the trading world. Yin believes that emotions are a crucial element of successfully trading, as emotions can often be a significant contributing factor in the decision-making process. The reality is that all of us are guilty of the "treat yo self" mentality, a term coined in the hit satire 'Parks and Recreation' starring Amy Poehler. Yin argues that we allow our emotions to dictate purchases and then use those emotions as a logical explanation to justify that purchase. Of course, it's no secret that emotions play a role in the decision-making process, but that influence extends beyond just affecting the individual in the trading world.

In fact, emotions can have a polarizing effect, according to Yin. "Fear and greed are two of the main emotional motivators of stock markets and business behavior," he states in an article on MarketWatch; he goes on to explain that while fear and greed are motivators to encourage movement in the market, they can be extremely damaging to a trader's portfolio as well as the market itself if mismanaged. He encourages traders to adhere to plans laid out for trading and to put those emotions out of a trader's mind as they can only serve to create failures rather than successes. These emotions will negatively affect the trader's decisions when it comes to profit and loss, which in turn is what leads to the damaging consequences these emotions create.

This mismanagement is a struggle that all traders must face at some point, in what Yin refers to as a "baptism by fire." A rather horrifying thought to consider, given how much money can be on the line at times when it comes to the trading world. However, it is in enduring this trial that traders emerge and become more successful. Though Yin claims this success can eventually come, many would more likely prefer to seek out traders who have already passed this test to yield more success. Thus Yin's methodology comes into play once again for traders as he details in his book, "Trading Secrets."

As a veteran trader himself, Thomas Yin has run this trial and emerged victorious to quite a notable degree. His success is proof to show how effective this strategy has been, not just for him but also for those who have learned and followed the methodology. You can learn more about Yin's formula for success, and the success others have found by following Yin's teachings on his website at https://www.onlinegurutrader.com/.