austerity programes
TOPIC: HOW EMOTION WORK ON THE STOCK MARKET Abstract
The aim of this report was to investigate on the effect of emotion on traders in the stock market. A survey on the attitude of traders in the stock market and how this trade affects emotions was carried out by different psychologies trying to describe how individual feel while trading in tension with millions of dollars at risk was conducted. The result indicate that majority of traders are driven by Greed, fear, hope and regret while trading and this affect trading decisions. The report concludes that emotions may play in the process of making objective financial decisions still the best possible decisions can be made in spite of whatever emotions those decisions may trigger. Introduction. Emotions exert an incredibly powerful force on human behavior. In psychology, emotion is often defined as a complex state of feeling that results in physical and psychological changes that influence thought and behavior. According to James-Lange theory of emotion suggests that emotions occur as a result of physiological reactions to events.
The press commonly reports that psychology drives financial decisions making and moves asset prices. Yet traditional implementation of financial economic model routinely assumes that individuals incorporate information into their decisions making process using statistics with calculated logic. A vast psychological literature shows that emotional state can significantly affect decisions making. This emotional decisions can be described using the cycle of market emotions.
The cycle of market emotions describe the different feelings individual faces in stock market. Studies have shown that emotionally driven investor behavior has a bigger impact on investment success than the actual performance of the market.
The aim of this report was to investigate on the effect of emotion on traders in the stock market. A survey on the attitude of traders in the stock market and how this trade affects emotions was carried out by different psychologies trying to describe how individual feel while trading in tension with millions of dollars at risk was conducted. The result indicate that majority of traders are driven by Greed, fear, hope and regret while trading and this affect trading decisions. The report concludes that emotions may play in the process of making objective financial decisions still the best possible decisions can be made in spite of whatever emotions those decisions may trigger. Introduction. Emotions exert an incredibly powerful force on human behavior. In psychology, emotion is often defined as a complex state of feeling that results in physical and psychological changes that influence thought and behavior. According to James-Lange theory of emotion suggests that emotions occur as a result of physiological reactions to events.
The press commonly reports that psychology drives financial decisions making and moves asset prices. Yet traditional implementation of financial economic model routinely assumes that individuals incorporate information into their decisions making process using statistics with calculated logic. A vast psychological literature shows that emotional state can significantly affect decisions making. This emotional decisions can be described using the cycle of market emotions.
The cycle of market emotions describe the different feelings individual faces in stock market. Studies have shown that emotionally driven investor behavior has a bigger impact on investment success than the actual performance of the market.