The statements of professionals can cause uncertainty: Sometimes it can be read that trade is 95% dependent on one's own psychology, sometimes it is only 50%. It probably depends on the strategy in question.
Someone who mainly acts according to technical criteria such as market technology may prefer the former. While the trader who relies on fundamental information sees it differently. But is the difference really that big? You probably meet somewhere in the middle.
How does the market technician deal with emotions?
Leaving emotions out - that's the basic message in trading psychology. The question is: when do emotions arise? An answer to this can probably only be given individually, because everyone deals with their emotions differently. In addition, not everyone has the same aversions.
The art of trading therefore often consists of finding a middle ground and recognizing for yourself how to keep your own emotions in check. The following example can be imagined:
The technical trader is aware that he leaves out a lot of information, especially fundamental information. He believes that this information significantly affects his emotional experience when trading. He therefore focuses on other factors, such as finding good technical set-ups and calculating risk management.
It is therefore not surprising that he sees the risk rather in the information overload and considers psychology as a fundamental factor, Accordingly, he also evaluates this with a higher proportion, e.g. B. with 90% success dependency.
How does the fundamental analyst deal with emotions?
The fundamental analyst, on the other hand, believes that good information leads to better trading decisions. Of course, this does not exclude the use of technical analysis, for example for a properly timed entry or the analysis of trends.
A closer look reveals that both types of trading try to avoid the same emotions, but in different ways and way. While the technical trader hides a lot of information, the fundamental trader searches for as much information as possible.
This makes it clear how the different information is created. Due to the greater effort involved in the fundamental analysis, the analyst of psychology is less relevant than the market technician.
It is therefore mostly the market technician who has accepted the relevance of psychology for himself, while the fundamentalist considers it overrated, Basically, the search for a lot of information can also lead to a certain amount of distraction.
In this case, the fundamental analyst also has a high chance of success, since he can get his emotions straight through information processing hires behind and carries out meticulous planning. Comparable to the meticulous keeping of a trading diary by a technical trader. As is well known, this is also a method to concentrate more on planning than on pure trading, in order to avoid overtrading.
Conclusion - the middle ground is the way
The above thoughts make it clear to us personally that both trading styles behave in a similar way when processing emotions during trading and that only the basic idea is different.
While the technical trader hides his emotions by Concentrating information on the essentials, he must still carry out meticulous planning in order to make his trading successful.
The fundamental analyst is meticulous right from the start, because he puts planning in the foreground. In a way, he reaches a distance from the market and can thus direct his emotions in the right direction.
Not to be forgotten: Both of course require knowledge of the type of trading you are. Because a technical trader would most likely find no distraction in the initial fundamental analysis, but rather a burden in his decision making - and vice versa.
So before you start thinking about how to keep your emotions in check, you should look into yourself and answer this question.