Trading Psychology Quiz 2

What role does 'risk perception' play in a trader's strategy?

• Determines the size of the trades

• Influences choice of market

• Modifies the leverage used

• All of the above

Which strategy is NOT effective in managing emotions during trading?

• Suppression of all emotions

• Scheduled breaks

• Reflection on emotional triggers

• Use of stress reduction techniques

What is a long-term method for managing stress specifically suited for traders?

• Constant monitoring of market news

• Regular physical exercise

• Increasing trade frequency

• Shortening trading hours

Which tool can help in improving decision-making when under significant market pressure?

• High-frequency trading algorithms

• Relying solely on technical analysis

• Predefined exit and entry rules

• Making decisions based on rumours

What should traders do immediately after experiencing a significant loss?

• Quickly recover by doubling down on new trades

• Take a break to analyse and understand the loss

• Ignore the loss and maintain the same trading pattern

• Shift completely to a new trading strategy

How often should traders practice mindfulness to see improvements in their trading?

• Once a month

• Only after stressful trading days

• Daily

• Only when losses occur

Which bias leads traders to follow other traders to follow other traders into a market?

• Recency bias

• Anchoring bias

• Availability bias

• Bandwagon effect

How can traders maintain their confidence after a streak of unsuccessful trades?

• Ignoring the outcomes of these trades

• Focusing on long-term outcomes based on their data

• Taking larger risks to compensate

• Switching trading strategies frequently

Effective goals in trading should be:

• Based on the performance of top traders

• Set as high as possible to motivate the trader

• Specific, measurable, achievable, relevant, and time-bound (SMART)

• Constantly shifting to match market conditions

Which is NOT an effective way to manage performance anxiety in trading?

• Avoiding all trading discussions

• Practicing simulated trading sessions

• Developing a clear trading plan

• Keeping a trading journal