Credit Counseling

How Behavioral Finance is Responsible For Decisions Made by Traders?

0 15

Though stock market does not represent a person but it is really hard to believe this fact. Like person it has different moods at time it can show drastic changes as well. In common terminology we call it as market fluctuations.It may show unpredictable changes one day and get back to normal the very next day. This feature of stock market makes it really difficult for traders to trade in it with good efficiency earning profitable returns. However using best stock futures tips while trading can help them to certain extent for earning good profit. By behavioral finance it is meant that making an attempt to understand market movements, reasons behind sudden price falls of stocks with the help of psychology-based theories. Following are some of the behavioral factors which affects investment decisions : 1)Over Confidence: Traders with this trait take wrong investment decisions mostly. They earn themselves low returns at the end because of thinking in wrong way. Various studies have shown that certain amount of patience and consistent learning is primarily required in stock market trading. Having high confidence in their trading strategy always causes them big problem. 2)Fear of loss : This characteristic of a trader makes them neglect possible profit opportunities because they fear to loose.Often it is witnessed that traders keep on earning loss for longer period of time as their fear is not making them ready to look forward to opportunities present before them. 3)Static nature: Various traders give priority to their choice of trading strategy irrespective of the facts whether it is suitable for current market situation or not. They keep on trading with one particular nature being resistive to changes and earn themselves huge loss. 3)Less information: The supreme factor of all which affects investment decision is lack of information. As we know that stock market is really a complex market and it is difficult to understand it. Traders keep on trading with having vague knowledge about it and because of less knowledge they are not able to perform in a better manner. Often it has been argued that there is no role of behavioral finance in investment decision but to certain extent it does plays a vital role. Traders must learn how to deal with this psychological characteristics of them and to deal with market movements in a better manner. Financial service providers have made trading very easy these days. Traders can any time opt a suitable adviser for themselves and trade in an most efficient manner. They suggest equity tips and others as well to help trader trade with good accuracy. Investing this extra capital can help in earning rich profit . It can concluded by saying this though there are many other factor which are responsible for a trading decision as well.But behavioral finance has a major role in it. To easily cope up with it and learn to trade in a wise manner traders can consult market experts, choose a adviser for themselves.

About the author / 

Robert B. Wilfong

Leave a reply

Your email address will not be published. Required fields are marked *

− one = nine

POPULAR The most recent

  • Tips to Finding a Good Forex Broker

    One of the first things you need to address in Forex trading is what sort of money management rules you will employ. Forex trading is a risky business at the best of times. For this reason it is important to do everything possible to protect your investments and get qualified advice. One way of doing…

  • Digismart Credit Card: Features, Eligibility & Documents Required

    When cash transaction was hampering the lives of the people, credit cards helped them to the rescue. Now, the credit cards are provided with an all-new feature which helps people experience another level of convenience. With the launch of Digismart Credit Card, people can now shop, travel, dine, etc. with one single card. One can…

  • How Crawfort helps customers to fulfill their needs?

    Many people are there who all are very much interested in going for different things. But to get those, you need the money, and it is not an easy job to earn and spend money always. Singapore is a place where almost everything is expensive, and for that, it comes among the most expensive cities…

POST TAGS

LATEST COMMENTS

    Find Us on Flickr

      GET IN TOUCH

      Mortgage Advisor Help is article directory operate by Peter a blogger and the content writer. Have a flair for writing Advertising, Blogs for Business, Mortgage, Loans, Fame, Marketing, articles and want to have it read by readers who share the same passion and interests. Feel Free to contact for any Question using our Contact Form.

      Stay up-to date with the latest news and other stuffs, Sign Up today!