Fear can cause traders to make rash decisions in trading and investing, forcing them to cut losses early or stop trading completely. Due to the uncertainty, fear can stop people in their personal lives from changing jobs. Greed can lead to careless behavior, such as taking excessive risks or holding on advantageous situations without conducting adequate study. Overconfident traders may overtrade and fail to adhere to a well-structured strategy because they think they can properly forecast the market and take larger positions than are supported by their analysis. These elements may cause losses and investment losses.
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