Trading psychology is the study of human mindset and how it functions in terms of identity, beliefs and behaviors while actively trading regulated and non-regulated assets. This area of psychology can reveal core human inclination^[1] s because trading requires a different mindset for success than our more primitive brain has developed and a mindset that is successful in most other endeavors. This area of study clarifies the mental and emotional aspects that will dictate a trader's decision and is an important factor in determining his success or failure in the trading process.

Certain emotions like greed, fear and regret play important roles in the trading process.

Greed is defined as excessive desire to accumulate more wealth. It can be both beneficial or destructing depending on how a trader utilize it in different situations. It has positive results in the bull market. The longer a trader stays on the game, the greater wealth he can gather. However, it is destructive when suddenly a bear market strikes in.

Fear on the other hand is the exact opposite to greed. It is the one that holds back a trader in taking the steps in the trading process. And like greed, it can be both destructive and useful depending on the situation of the market.

Regret is another emotion a trader must take careful consideration. There are many traders who jumped into the trading process because of regret and finally finding themselves losing more money in the process.

A sound psychology in trading is a must if one wished to become a successful trader.