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It’s been a wacky market environment and with the presidential election right around the corner…

I think we’ll be in choppy waters for quite some time as the market will need some time to digest the news. 

Not only that, but there’s been an uptick in cases of the deadly virus… and there’s no stimulus yet. Of course, there are still plenty of companies set to report earnings.

With so much uncertainty, I wanted to take a step back and talk to you a bit about trading psychology.

Right about now, some traders are getting inside their own heads — and that could drive you bonkers. 

There’s one trading mentality that I believe all traders should avoid at all costs, and it’s something that can eat at your account and prevent you from developing an edge in the market.

 

If You’re Just Following The Herd, Listen Up

 

Are you the person who sees everyone running and starts running too? Or do you simply move out of the way of the runners?

No, we aren’t talking about that pivotal moment in every natural disaster movie. We are taking a deep dive into a trader’s psyche and how herd mentality can be the enemy.

Currently, it’s running rampant with the volatility of the market.

When stocks are bleeding and selling off, what do you think typically runs through investors and traders minds, if they’re long?

Well, they’re probably wondering if they should sell or not, right?

The amateur traders will dump and ask questions later, while the elite traders will be on the hunt for trading opportunities.

When it comes to the market, it’s difficult to fight the urge to follow the herd.

Watching the rattling sell-off and feeling that deep desire to do it too. This can be caused by two things, and I don’t think traders should ever underestimate their pull.

1-      The dreaded peer pressure parents have been nagging about since the beginning of time. Traders following along with the crowd. Stumbling into the pattern of choosing acceptance over profits.

2-      A bad undiagnosed case of FOMO. The fear of missing out is the curse that just keeps giving. The unsettling feeling that everyone seems to know something that you don’t.

Guess what… This is far from a new phenomenon.

This is the same mentality that causes panicky selloffs that can lead to plummeting stock prices…. And it all can lead back to the herd invoking a “self-fulling prophecy.”

Listen, even experienced traders fall victim to herd mentality. Emotions run high and are being fed off fear and uncertainty.

 

Ready for the good news?

Just because you see stocks going down doesn’t mean the end is near. Stocks dropping does not mean nothing out there is climbing.

There are dozens of stocks going up and following the crowd means you might miss out on money-making opportunities. The trader that follows the herd can be essentially stock blocking themselves.

So don’t miss out on all the potential that can be lurking out there just because the pull of the panic vortex is too strong.

This mentally has been the focus of many scientific, psychological, and historical studies.

And you know what sells? Fear.

But you know what feels way better and is 100 times more enjoyable? Pulling in profits while the crowd acts a fool.

I can tell you this, there’s a new trend in the market and small-cap momentum stocks have been hot. I mean, even when the markets were bleeding, there were pockets in which stocks were popping off.

I want to show you how to identify these opportunities. The easiest way I know how to teach you is by providing you with my chart patterns guide.

You can grab Momentum Hunter at zero cost right here, and you’ll discover some of my favorite setups and how I uncover momentum stocks before they run.

Author:
Jason Bond

Jason taught himself to trade while working as a full-time gym teacher; his trading profits grew eventually allowed him to free himself of over $250,000 in student loans!

Now a multimillionaire and a highly skilled trader and trading coach, Over 30,000 people credit Jason with teaching them how to trade and find profitable trades. Jason specializes in both swing trades and in selling options using spread trades, which balance the risk of selling options. Jason is Co-Founder of RagingBull.com and the RagingBull.com Foundation which donates trading profits to charity. So far the foundation donated over $600,000 to charity.

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