The stock market emotions are being played by two major players: Greed and fear. They are the forces driving all market participants – Institutional managers, stock brokers, investors, traders and yourself.

Perhaps you are saying that you will never let fear and greed interfere with your trading, but be assured that they will be. It is not something that you should feel ashamed of. It is one thing you have to realize, come face to face, if you are determined to be a successful stock trader or investor

What do greed and fear look like in the stock market trading arena?

You have been noticing a particular stock for some time now. The stock seems to be doing well, so you made a decision to buy. You bought it at a reasonable price and now it is trending higher just as you anticipated it would.

Now greed steps up to the plate and says to you, this is going to be a rocket ship. So you buy some more shares. Or your stock moves a few points and goes passed the price that you decided to get out. Greed tells you this baby is going higher tomorrow so you hang on.

When stocks move higher to the upside, greed causes the market participants to join in hoping for big profits.

Stock prices usually fall faster then they go up, and when this happens, fear now steps up to the plate.

Let us analyze the example above, where your stock moved beyond your exit price and you held on because you were on the side of greed. The next morning the stock price went down. The stock is being under heavy selling pressure, but you would not sell because greed is convincing you that higher prices would come back. While you are holding on, the price keep going down and now fear is popping up, but it is too late, now you have looses not profits.

Everyone goes through this until they have mastered the ugly faces of greed and fear. Master this and you are well on your way to becoming a successful stock trader.

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