Fear and Greed

S

seadog

Throw in your 2 cents worth on these two basic principles of trading.
I'm sure some quotes will show up eventually.
seadog
 
I believe you can conquer fear with knowledge and understanding. If one fears lightning and thunder, understanding lightning and thunder will alleviate the fear.

If you fear a particular market/trade, you can wait it out on the sidelines or as understanding becomes greater you can remain in the market longer under adverse circumstances when other "sane" {:>) people are out.

Greed on the other hand, perhaps it is more emotional origin than fear, or has greater external and internal ego influences.
 
I was trained as a broker in the mid eighties.The chairman, an old war horse of the markets, stated what drove the markets was Fear and Greed.He explaied Fear was from people who were afraid they were missing moves in the market and would jump in with disregard to reaserch and logic. Greed was from those people who were making good returns, but would not take profits because they wanted more. Then they would loose their profits and jump back in back to fear again.
Every now and again I hear a seasoned pro repeat those words.
I threw the tought out there to get some feed back.
seadog
 
Quote from nutmeg:

I believe you can conquer fear with knowledge and understanding. If one fears lightning and thunder, understanding lightning and thunder will alleviate the fear.

If you fear a particular market/trade, you can wait it out on the sidelines or as understanding becomes greater you can remain in the market longer under adverse circumstances when other "sane" {:>) people are out.

Greed on the other hand, perhaps it is more emotional origin than fear, or has greater external and internal ego influences.
More...

True fear is the unknown.
The Unknown
As we know,
There are known knowns.
There are things we know we know.
We also know
There are known unknowns.
That is to say
We know there are some things
We do not know.
But there are also unknown unknowns,
The ones we don't know
We don't know. "

-Rummy

That is my only fear.

You work hard so you learn how to work smart. As the Preparation Curve increases the Fear Curve moves inversely. As you obtain more wealth there comes a bigger need for preparation. If you have great habits this preparation becomes automated and your work is very efficient.

Having said all that being a trader makes you less fearful. Is it irrational exuberance? That all depends on how much unknown unknowns there are in your reality.

Greed is good. Greed cl.... GG put it perfectly.

Moral hazzard is intersection between the greed curve and fear curve. Initially fear starts high because of your awareness of your mortality and greed starts low because of your limiting-beliefs. There is a dangerous crossroads where these two curves meet. This is the critical moment for human beings.
 
Is there really any difference between greed and ambition?

Any difference between fear and caution?

I think fear and greed are all normal. Understanding the market and yourself are the key.
 
I think that greed can often be characterized as an overcompensation for fear. Picture a scared kid whistling as he takes a short cut through the grave yard at night. As with any other form of exaggerated behavior, greed makes you wonder about the underlying cause.
 
Fear eventually is used correctly can produce greagt results. He who is not willing to risk anything; is not willing to gain anything...
 
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