Here, we expand on the two significant self-inflicted trading psychologies that can potentially destroy a trader’s account. We are familiar with FOMO, the Fear Of Missing Out, but there is also the Fear of Being Wrong. As we explore these two psychological pitfalls in trading, think about how you feel during your trading experience.



The Fear of Being Wrong: Over-confidence

More often than not, inexperienced traders often start to get an inflated sense of confidence especially if they’ve made profit on their first few trades. This euphoric feeling is great because you feel like you are invincible.



Obviously, confidence is required to be a successful trader but tread lightly if you are new to the trading scene. Over-confidence will likely put you in tricky spots where you’ll speculate more and take bigger risks.



The pitfall is when your over-confidence overrides the trends and market analysis and compels you to trade irrationally or emotionally, rather than being an objective investor.



With over-confidence often comes over-precision, over-estimation, and over-placement.