How does the psychology impact on stock market trading business?

Psychology impacts in my ways , I will be taking fear and greed , Fear&Greed always creates dilemma in traders if they don't have proper guiding system to trade .

Let's come to pyschological part of it,  Fear & Greed are the biggest price drivers in the share market , How? 

Let's say you hold the stock called XYZ and it is trading at the profit of +20% either thing you can encounter 1) you have fear that it may come  down and it may went to loss as well , even though stock as potential to move higher and Higher but you have fear that it may not go higher, why this fear ? Since you may have encountered similar situation in past, where some of your stocks went to profit and quickly fell down to Red and you booked the loss or you are purchasing the market in that way like taking profits quicker. 

2) coming to other way, when the stock is giving you an +20% Return but you are not ready to book your profits since you have hope or having confidence that stock may go even higher, but practically stock may be topping out(No further price movement in share as per technical analysis). This is called greed, when stock is giving last leg of profits and giving alarm, it may going down in coming days but due to your greed you hold the stock with stubbornness. 

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Psychology plays a significant role in stock market trading business. Investor sentiment, fear, and greed can drive market movements. Behavioral biases like loss aversion and herd mentality can influence decisions, leading to irrational trading patterns. Understanding and managing these psychological factors are crucial for successful trading strategies. Techniques such as maintaining emotional discipline, employing risk management strategies, and conducting thorough analysis can help mitigate the impact of psychology on trading decisions. read less