Fear and Greed: The Twin Killers of Trading Success

Warren Buffett famously said: "Be fearful when others are greedy, and greedy when others are fearful." Great advice—but almost impossible to follow when those emotions are happening inside your own head.

Understanding Fear in Trading

Fear manifests in predictable ways:

Fear of Losing (Loss Aversion)

Studies show losses feel 2.5x more painful than equivalent gains feel good. This asymmetry causes traders to:

• Hold losing positions too long (hoping for recovery)
• Exit winning positions too early (protecting profits)
• Avoid valid setups (fear of another loss)

Fear of Missing Out (FOMO)

Watching a trade you didn't take go to the moon triggers intense regret. This leads to:

• Chasing entries after the move has happened
• Ignoring risk parameters to "not miss out"
• Overtrading on every potential setup

Understanding Greed in Trading

Greed is fear's dangerous partner:

Moving the Goalposts

Your plan said take profit at 2R. But the trade is moving so well! What if it goes to 5R? Suddenly you're holding with no exit plan.

Oversizing Positions

"This setup is perfect—I'll go in bigger." Famous last words before account-destroying losses.

Ignoring Risk Management

Greed whispers that stop losses are for amateurs. Until one trade erases a month of gains.

The Neurological Reality

Brain imaging studies reveal that financial gains and losses activate the same regions as drugs and physical pain. Trading literally triggers addiction and survival circuits. Expecting willpower to overcome millions of years of evolution is unrealistic.

The Only Reliable Solution

You cannot beat your biology through willpower alone. The solution is to remove yourself from the decision-making process.

When signals come from an external, systematic source:

• You can't "feel" your way into a bad trade
• Position sizing is predetermined
• Exits are defined before entry
• Emotions have no input vector

Trade Without Fear or Greed

TradeWhatITrade's signals are generated without emotion. They're backtested, systematic, and delivered with clear entry, stop, and target levels.

Ready to remove fear and greed from your trading? View our plans and start trading with clarity.