How I Manage Psychology in Trading

three emotions that control your trading | Edition 74

By the end of this article you will know exactly how to manage the three emotions that ruin all traders.

Why should you listen to me?

I made every psychological mistake possible.

I chased losses, held losers too long, and revenge traded after big drawdowns. It cost me real money and sleep.

I tested what actually works on my own account and learned from my personal therapy sessions.

Today my results are much more stable because I’ve mastered these three emotions.

Here’s what we’ll cover so you know what to expect.

First I will explain greed, hope, and fear, why they appear and how to manage each one.

Then I will show you how to handle the pain that comes with trading every single day.

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The three emotions that control your trading.

In trading, psychology is about three main emotions that you have to manage every single day.

These three emotions are: greed, fear, and hope.

If you fail to manage them, your whole system goes down the drain.

I believe all three of these emotions get triggered in each of us, in some people more easily, in others more intensely, depending on the different experiences and life events we’ve gone through.

Since I’m not a therapist, I’ll speak strictly from my own experience and from what I’ve learned in the sessions I’ve had with my personal psychotherapist.

Greed

The feeling of greed shows up when you want more.

It leaves you dissatisfied when you lose, because you see others winning.

And it also leaves you dissatisfied when you win, because you feel you could have made more.

This cycle keeps repeating until you eventually lose everything, and at that point a new feeling of insecurity is triggered.

In my opinion, greed is the second‑easiest of the three emotions to manage.

Greed comes from NOT HAVING REALISTIC EXPECTATIONS.

This is a common problem for beginner traders, because many of them don’t even “know what they don’t know”.

They get manipulated by influencers on TikTok and YouTube into believing that 500% or 1000% returns are perfectly normal.

So they start their journey thinking they’ll hit those kinds of returns in a very short period of time.

What they don’t realize is that this kind of year is almost certainly an outlier.

In the same way, back in 2024, just as we were coming out of a bear market with extraordinary conditions, I posted an 800% return. That kind of performance is not normal.

A 20% average annual return, year after year, is already phenomenal , you’re beating the index roughly two‑fold.

Not many traders can do that consistently, year after year.

When your expectations are too high, you start chasing those gains, and naturally you begin to take more risk.

It’s only a matter of time before you blow up.

Fixing GREED is simple, but not easy: practice humbleness.

Accept that you’re not special, that 90% of traders aren’t even profitable.

Accept a modest return and focus on the process.

In doing so, you at least give yourself a chance to reach super performance and exceptional returns.

None of the traders who turned out to be outliers, posting returns above 100% per year, set that as their goal.

Their goal was to follow their process.

You cannot control how much you earn, you cannot control the market; you can only control how much you lose.

Be content with what you have.

Meditate, set realistic goals, stop comparing yourself to other traders or friends, and watch how greed starts to fade.

Hope

Hope is, in my view, the easiest emotion to manage.

It usually shows up when you’re sitting in unrealized losses , when your trade is moving against you and price is getting close to your stop-loss, or worse, when you’re not using any stop-loss at all and you’re just hoping it “comes back”.

At that point, all you hope for is to get back to break even; you’re not even aiming to make a profit anymore. (Some traders even start praying. 🙏)

Then, after losing 60% of their capital, they begin to gamble and say: “Okay, now I’ll go all in and recover all my losses.”

They hope that this time it will be different and they just throw themselves into it.

The reason I say hope is the easiest to manage is that this emotion comes from incompetence.

We usually resort to hope when it’s our last option, when we’re overwhelmed by the situation.

Think about moments in your life when you were fully in control, confident, and knew exactly what you were doing. Did you rely on hope then?

No.

You didn’t need hope, because everything was already an automatic, well‑practiced process.

When your palms are sweating, your heart is pounding, you’re anxious, maybe even having panic attacks, your body is giving you signals that you’re not prepared , that, bluntly, you don’t know what you’re doing.

Your body sends all these signals telling you to stop.

Seriously, listen to your body , or your subconscious , it often knows better.

So the solution is simple:

start fixing your risk management and your strategy, and you will eliminate HOPE from your trading decisions.

When you know your risk of ruin, your expectancy, your typical percentage drawdown, when you know exactly when your setups appear and when you should stay in cash, you’ll see there’s no reason to lean on hope anymore, because it’s just pure math.

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FEAR

I left fear for last because, personally, I consider it the hardest emotion to overcome.

Fear is also deeply personal.

We all have different kinds of fears, triggered by our past experiences and traumas.

Each of us has a different threshold for fear, which is why we use different risk‑management systems.

In trading, fear comes from the unknown, from the fact that you don’t know the future and have no control over it.

I see fear in trading as closely linked to pain, because you’re afraid of losing money, and that loss will cause emotional pain.

Unfortunately, there is no universal solution for fear.

The only way to manage it is to confront it, you have to take control.

You can’t escape fear; it will always be there. The only option is to reduce its power.

In therapy, fear is often treated through Exposure Therapy, a technique where you create a safe environment and expose yourself to your fear.

You repeat this process until the fear gradually decreases.

In trading, I see two ways to help with the feeling of fear:

1. Reduce your risk percentage to the point where you can execute without tension, because a position that’s too large amplifies fear and pushes you toward impulsive decisions.

2. Accept loss as a normal part of the process.

All three of these emotions will cause a lot of PAIN.

Once you decide to become a trader, you have to accept that your career and your life will involve pain.

Whoever sold you the idea that it’s “easy money” has misled you.

The world of trading is full of pain.

When you lose, it hurts. When you win, it hurts (you’ll think about how you could have made more). When you miss opportunities because you were on vacation, it hurts.

All of this pain will wear you down mentally.

Your mind and body will be under attack and you will feel miserable.

You need to be brutally honest with yourself and accept certain realities.

Fail to do that, and you’ll lose a lot of money.

Successful traders have something you don’t yet have: experience.

They know how to manage pain. They know it never truly disappears, they just learn to numb it.

It’s like lifting weights: the pain never goes away, even as your muscles grow; you simply get used to different thresholds.

With fear and pain, you’ll fight a very personal battle, every single day.

I hope I haven’t discouraged you, but I wanted to be very real with you and share my experiences.

It took me years to learn how to manage these emotions and to simplify them the way I did in this article.

Understanding this in theory is one thing, applying it in real time with proper position sizing and structured exits is another.

That’s exactly why I built Freedom Trades PRO.

Inside, you get live trade ideas, real-time trade management, and daily context, so you see exactly how these concepts play out in real trades.

If you are thinking about joining the community, right now is the best time to do it.
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Click the button, join Freedom Trades PRO with the yearly plan, and come trade with us, in real time.

See you inside :)

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“One trade closer to freedom.”
Vladislav

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