The seven deadly sins are the moral rules that many people will heed when trading stocks. There’s very little point in buying a stock if you don’t follow all the rules. By knowing what the “sins” are, you should at least make a start in understanding how trading works.
The Seven Deadly Sins of Trading
1. Lust
One of the main sins of trading, Lust, involves greed. Since we don’t know anything about the market, we often try to make more money by putting more money into the market.
There’s nothing wrong with being greedy when you know what the market is doing. This can sometimes be one of the most beneficial strategies for traders doing forex trading sa.
2. Gluttony
The next sin is Gluttony. This has something to do with over eating the market’s food and potentially causing unnecessary selling. Traders often try to take advantage of trends by taking excessive profits when they emerge.
However, there are times when this can backfire. If you push your profits too quickly, you might make the mistake of selling low. However, with this sin, you need to be careful about over-trading.
3. Greed
This sin is similar to Lust, except it has a little more of an ethical connotation. Traders can frequently become fixated on a market trend and frequently try to turn a trade into an investment.
However, you need to be careful here. In some ways, it’s better to be greedy than risk ending up with nothing when you try to invest.
4. Wrath
Rage is the fourth sin of trading. Many traders feel angry when they see markets move in the wrong direction. By angering the market, you could cause an extreme swing in the market. There’s nothing wrong with being angry when trading.
It’s generally better to keep calm when a trading strategy doesn’t work or the market suddenly reverses. Don’t let your rage cause a sudden panic in your portfolio.
5. Envy
Envy is a unique sin that traders rarely use. Traders don’t have the necessary knowledge to make money by taking advantage of others’ misfortune. However, it’s good to remember that the price of trading is rarely completely fair.
If there’s a market trend, you’ll often have to go against it to make any money. However, you can use the information you have to profit from the other side of the market.
6. Sloth
The sixth sin of trading is Sloth. This involves idleness. While it’s essential to ensure that you have a good strategy for trading, this doesn’t mean that you should be sitting around for hours on end.
Sometimes it pays to take a break, and sometimes it’s possible to use your trading skills while taking some time to relax.
7. Pride
Pride is the seventh sin of trading. If you’re overly confident, you might try to push your trade too far too quickly. However, if you do this, you might end up being out of the market at a crucial moment.
Instead, it’s often better to put in a limit order when you’re feeling extra confident and then move away from the market when it’s evident that there’s not enough volume.
Conclusion
There are seven deadly sins of trading that you should be aware of. While the list isn’t exhaustive, it can help you stay focused when trading. It can also make you warier of a market trend, and consider whether you’re too over-aggressive in your trading approach.
