Tag: psychology
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Ambiguity aversion
Many of us might have heard about “risk aversion“, which is a general dislike for risk. But, what is “ambiguity aversion”? To address this question, we need to first distinguish between “risky events” and “ambiguous events”. Let’s do that through a practical example. Imagine a simple coin toss game where you win $1 if the…
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Psychology of trading
The psychology of trading encompasses the emotional states and moods that traders go through during their trading activities. Emotional trading can have an adverse impact on a trader’s performance, leading to mental issues as well as financial loss. Therefore, all traders should have at least a basic understanding of how emotions influence trading activity. We’ve…
