Trading Lesson of the Week

• March 16, 2025
• TSLA | TSLL | TSLQ

In This Week’s Issue:

• Upcoming Events – Learn to be a Better Stock Market Investor
• Market Outlook – Market Bounce Back
• This Week’s Market Minutes video – Why I Love Stock Market Crashes
• Trader Training – The Negative Effect of Emotion on Trading Decisions
• Strategy – Is it Time to Buy TSLA?

Upcoming Events – March Webinar Series

Learn how to be a better investor and profitable trader with this free four part series. For best results, attend them live and in order as each will build on concepts from the earlier sessions.

• The Effective Way to Analyze Any Stock in Seconds
  • Tues. March 25 6:00 PM PT
• Creating Wealth – How to Invest in the Stock Market Successfully
  • Wed. Mar 26 6:00 PM PT
• Winning Trading Strategies, Day and Swing Trading for Part of Full Time Income
  • Thurs. Mar 27 6:00 PM PT
• How Stockscores Tools and Education Can Help You Make Stock Market Profits
  • Saturday March 29 9:00 AM PT

CLICK HERE TO REGISTER https://www.stockscores.com/trader-training/upcoming-events/

Market Outlook – Market Bounce Back?

After a three-and-a-half-month downward trend in stocks, the market finally showed signs that it is making at least a short-term bottom. I say short term because today was a break of the downward trend of the past month but not the longer-term downward trend that began in December. Therefore, we will likely see a short-term improvement as the markets make a recovery from oversold conditions. However, we have not yet seen the signal that the longer-term weakness in the market is over. This is just the first step toward that.

This Week’s Market Minutes Video – Why I Love Stock Market Crashes

Stock market crashes create opportunity. I this video, I explain why and how to take advantage of them. Then, I provide my regular market analysis and look at the trade of the week on SUNE.

CLICK HERE TO WATCH THIS WEEK'S VIDEO ON YOUTUBE

https://youtu.be/hSg9wp65y1c

Commentary – The Negative Effect of Emotions on Trading Decisions

Stock trading is as much a psychological game as it is a financial one. Many traders, regardless of experience, fall victim to emotional biases that lead to costly mistakes. The emotional attachment to money, fear of missing out (FOMO), and impulsive decision-making often result in irrational trading behavior that deviates from sound investing principles.

One of the most common psychological pitfalls in trading is the reluctance to take losses. Investors often develop an emotional attachment to their money and their investments, making it difficult to accept when a trade has gone wrong. Instead of cutting losses early, traders hold onto losing positions, hoping the stock will recover. This behavior, known as loss aversion, stems from the pain of realizing a financial loss, which is psychologically more impactful than the pleasure of an equivalent gain. As a result, traders let their losses run while prematurely selling winning trades to lock in small profits, ultimately damaging their overall returns.

Another emotional trap traders fall into is the fear of missing out (FOMO). When a stock experiences a rapid price increase, traders may feel pressured to buy in at inflated prices, fearing they will miss further gains. This often leads to impulsive decisions, where traders chase hot stocks without the risk and reward profile of the trade. FOMO-driven trades frequently end in losses, as traders buy near market peaks and sell when the hype fades.

Moreover, emotions often drive traders to take risky, questionable trades rather than relying on data and analysis. Instead of following a well-structured strategy, traders may act on gut feelings, media hype, or market rumors. Emotional decision-making can lead to overtrading, excessive risk-taking, and falling for market manipulations. Successful traders recognize that emotional discipline is crucial and implement strategies such as pre-defined stop-loss orders, strict risk management, and objective analysis to mitigate impulsive decisions.

Understanding and controlling emotions is essential for success in stock trading. Investors who learn to manage their emotional biases, accept losses when necessary, and make decisions based on logic rather than impulse can improve their long-term profitability. The market is driven by psychology as much as fundamentals, and those who master their emotions gain a significant edge over those who do not.