Introduction: The Two Emotions That Control the Market
Every candle you see on a chart — red or green — is driven by just two emotions: fear and greed.
They are the invisible forces that move prices, trigger traps, and test your mental strength every single day.
When I lost ₹25 lakhs in the market, I thought my biggest problem was lack of strategy.But with time, I realized the truth —
“The market didn’t beat me. My own fear and greed did.”
Once you understand and control these two emotions, trading stops being gambling — and starts becoming business.Let’s decode them step-by-step.
1. Understanding Fear in Trading
Fear is the emotion that makes you:
Exit early even when your setup is working
Avoid taking trades after a loss
Doubt your analysis and system
Miss opportunities due to overthinking
Fear usually comes from one thing — attachment to money.You fear losing what you can’t afford to risk.
Truth: If your position size is too big, fear will always control you.The solution is not courage — it’s proper risk management.
2. Understanding Greed in Trading
Greed shows up as:
Holding trades longer than planned hoping for “just a bit more”
Entering random trades after a big win
Doubling position size after profits
Ignoring stop-loss because “this time it’ll bounce”Greed makes you forget that market rewards discipline, not hope. The moment you chase money, you lose control.
Truth:Greed doesn’t come from wanting profit. It comes from impatience — wanting it too quickly.
3. The Cycle of Fear and Greed
Here’s how most traders get trapped:
1. You take a winning trade → feel confident → greed activates.
2. You overtrade → lose → fear activates.
3. You skip setups → miss opportunity → greed returns.
This emotional loop keeps repeating until your account — and confidence — are both gone. To break the cycle, you must build awareness and rules before emotions appear.
4. The 3 Golden Rules to Defeat Fear and Greed
Rule 1: Fix Your Risk Before the Trade
Decide your stop-loss before you enter, not after. If you know the maximum you can lose, fear automatically reduces.
“Fear grows in uncertainty. Discipline grows in clarity.”
Rule 2: Predefine Your Profit Target
Always take profit where your plan says — not where your emotions say. The goal is consistency, not jackpots. If your plan says 1:2 risk–reward, book it. The market will always tempt you with “it can go more” — ignore it.
Rule 3: Limit the Number of Trades Per Day
The more you trade, the more emotions take control. Set a daily limit — e.g., 2 to 3 trades max. This forces you to focus on quality over quantity.
5. Use Logic, Not Feelings — Build a Trading System
Fear and greed thrive in uncertainty. A clear system kills both. Your trading system should include:
Entry conditions (chart pattern, confirmation, volume)
Stop-loss placement
Profit target or trailing stop method
Risk per trade
Once this is defined, your role becomes execution — not emotion.
Remember: Professional traders don’t fight emotions during the trade. They remove emotion before the trade by following a system.
6. Strengthen Your Mind Outside the Market
If you are emotionally unstable in life, you will be emotional in trading. So, work on your mental foundation daily.
Start your day calm — avoid checking charts immediately.
Meditate or breathe deeply for 10 minutes.
Take breaks after every session.
Don’t trade when you’re angry, tired, or distracted.
When your life is balanced, your trading decisions become calmer and clearer.
7. Replace Emotion with Awareness
Every time you feel fear or greed, pause for 10 seconds. Acknowledge it. Don’t fight it — just observe it.
“I’m feeling fear because I lost my last trade.” “I’m feeling greed because this trade is working.”
That small gap of awareness gives you control. You stop reacting, and start responding with logic.
8. Train Yourself for Emotional Neutrality
A professional trader looks at both red and green candles neutrally. Profit or loss — both are just data.
Your goal is to reach a point where:
A profit doesn’t make you overconfident.
A loss doesn’t make you emotional.
It takes time, but that neutrality is your superpower.
Practice: End each day by writing —“Today, did I act from logic or from emotion?”Tracking this simple question daily builds emotional muscle.
Final Thought: Control Yourself, Not the Market
You can’t control what the market will do next. But you can control how you will respond.
Fear and greed will always exist — but they don’t have to control you.
Once you master them, trading becomes peaceful, focused, and profitable.
“The goal is not to eliminate emotions.The goal is to not let emotions eliminate you.”
