Trading Psychology Quiz 7

How can peer influence negatively affect a trader's decisions?

• By encouraging more independent analysis

• By increasing confidence in personal strategies

• By causing traders to make decisions based on others' opinions rather than their own analysis

• By enhancing risk management skills

Why is establishing a routine important for traders?

• It guarantees profits

• It helps create consistency and discipline in trading

• It allows for more spontaneous trading decisions

• It reduces the need for analysis

What is an effective way to manage pressure during trading?

• Ignoring all feelings of stress

• Practicing mindfulness and relaxation techniques

• Increasing the number of trades to stay busy

• Relying on high-risk trades to feel in control

What is confirmation bias in trading?

• The tendency to ignore information that contradicts existing beliefs

• The ability to predict market trends accurately

• The habit of constantly changing trading strategies

• The preference for low-risk trades

Why is it crucial to set realistic expectations in trading?

• It eliminates all trading risks

• It helps maintain motivation and manage stress

• It guarantees high returns

• It allows for more aggressive trading

How does self-awareness benefit traders?

• By ensuring they never make mistakes

• By helping them understand their strengths and weaknesses

• By eliminating the need for a trading plan

• By increasing their reliance on others' advice

What is cognitive dissonance in the context of trading?

• The discomfort experienced when holding conflicting ideas or beliefs

• The certainty of making profitable trades

• The ability to stay focused under pressure

• The habit of following a single trading strategy

How can overconfidence negatively impact trading performance?

• By reducing the number of trades made

• By increasing the likelihood of taking unnecessary risks

• By improving decision-making skills

• By ensuring higher profits

What is an effective strategy to manage FOMO in trading?

• Ignoring all trading opportunities

• Setting clear entry and exit rules

• Making impulsive trades based on market hype

• Increasing trade size to maximise gains

How can practicing gratitude benefit traders?

• It guarantees profitable trades

• It eliminates the need for technical analysis

• It allows traders to ignore market trends

• It helps maintain a positive mindset and reduces stress