Day Trading Trading Psychology

Question 1

What is FOMO in trading?

Accepted Answer

Fear Of Missing Out — the anxiety of missing a profitable trade that leads to impulsive decisions

Answer

A trading platform

Answer

A type of order

Answer

A chart pattern

Question 2

Why is having a trading plan important?

Accepted Answer

It provides a systematic framework for entry, exit, and risk management, removing emotional decision-making

Answer

It is required by regulators

Answer

It guarantees profits

Answer

It is optional for experienced traders

Question 3

What is 'revenge trading'?

Accepted Answer

Impulsively increasing trade size or frequency after a loss to try to recover money quickly

Answer

Trading against a rival

Answer

A profitable strategy

Answer

Trading to get back at the market

Question 4

What is the importance of a trading journal?

Accepted Answer

It documents trades, reasoning, outcomes, and emotions to identify patterns and improve performance

Answer

It is a diary about your feelings

Answer

It is only for tax purposes

Answer

Successful traders do not need one

Question 5

What does 'cutting losses short' mean?

Accepted Answer

Exiting losing positions quickly at predetermined stop-loss levels instead of hoping they recover

Answer

Making only small trades

Answer

Avoiding all risk

Answer

Trading only profitable stocks

Question 6

What is confirmation bias in trading?

Accepted Answer

The tendency to seek out information that supports your existing view while ignoring contradictory evidence

Answer

Confirming your order was placed

Answer

A bias toward confirmed patterns

Answer

A type of technical indicator