{"id":2373,"date":"2026-10-07T11:32:59","date_gmt":"2026-10-07T11:32:59","guid":{"rendered":"https:\/\/entri.app\/explore\/?post_type=curriculum&#038;p=2373"},"modified":"2026-10-07T11:34:23","modified_gmt":"2026-10-07T11:34:23","slug":"fear-and-greed-in-trading","status":"publish","type":"curriculum","link":"https:\/\/entri.app\/explore\/stock-market\/fear-and-greed-in-trading\/","title":{"rendered":"Fear and Greed in Trading"},"content":{"rendered":"<p>Fear makes you exit good trades too early or avoid them completely. Greed makes you chase profits, take oversized risks and ignore your plan.<\/p>\n<h2><strong>What are Fear and Greed in Trading<\/strong><\/h2>\n<p><strong>Fear<\/strong> in trading is the urge to avoid or escape loss. It shows up as<\/p>\n<ul>\n<li>panic selling<\/li>\n<li>hesitating at a valid entry<\/li>\n<li>closing a profitable trade too soon because you&#8217;re scared it will reverse<\/li>\n<\/ul>\n<p><strong>Greed<\/strong> is the urge to make more than your plan allows. It shows up as<\/p>\n<ul>\n<li>holding a trade past your target<\/li>\n<li>adding to a position without a reason<\/li>\n<li>taking a bigger position to win back money faster<\/li>\n<\/ul>\n<table>\n<tbody>\n<tr>\n<td><strong>Fear<\/strong><\/td>\n<td><strong>Greed<\/strong><\/td>\n<\/tr>\n<tr>\n<td>What you want<\/td>\n<td>Safety<\/td>\n<td>More profit<\/td>\n<\/tr>\n<tr>\n<td>What you do<\/td>\n<td>Exit early, skip trades<\/td>\n<td>Overtrade, oversize, hold too long<\/td>\n<\/tr>\n<tr>\n<td>What it costs you<\/td>\n<td>Missed gains, selling at lows<\/td>\n<td>Larger losses, giving back profits<\/td>\n<\/tr>\n<tr>\n<td>Typical thought<\/td>\n<td>&#8220;What if it falls more?&#8221;<\/td>\n<td>&#8220;What if it goes even higher?&#8221;<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Neither emotion is wrong. Fear keeps you alive in the market and ambition keeps you in the game. The problem starts when emotion replaces the plan.<\/p>\n<h2><strong>How Fear Shows Up in Your Trading<\/strong><\/h2>\n<p>Fear is rarely obvious. It usually looks like &#8220;being careful&#8221;. Watch for these signs:<\/p>\n<ol>\n<li><strong> Panic selling<\/strong><\/li>\n<\/ol>\n<p>The price drops sharply and you sell without checking whether your stop-loss or setup has actually been hit.<\/p>\n<ol start=\"2\">\n<li><strong> Cutting winners early<\/strong><\/li>\n<\/ol>\n<p>You&#8217;re in profit, a small pullback appears, and you exit long before your target.<\/p>\n<ol start=\"3\">\n<li><strong> Hesitating at entry<\/strong><\/li>\n<\/ol>\n<p>The setup matches your plan, but your last loss makes you freeze. By the time you feel &#8220;safe&#8221;, the move is over.<\/p>\n<ol start=\"4\">\n<li><strong> Moving your stop-loss<\/strong><\/li>\n<\/ol>\n<p>You widen it because you can&#8217;t accept being stopped out. This is fear of loss disguised as patience.<\/p>\n<ol start=\"5\">\n<li><strong> Avoiding the market after losses<\/strong><\/li>\n<\/ol>\n<p>You skip valid setups for days because you no longer trust yourself.<\/p>\n<h2><strong>How Greed Shows Up in Your Trading<\/strong><\/h2>\n<p>Greed usually arrives after a few wins, when you start feeling unbeatable.<\/p>\n<ol>\n<li><strong>Overtrading.<\/strong> Taking trades that aren&#8217;t in your plan because you want more action.<\/li>\n<li><strong>Oversized positions.<\/strong> Increasing your quantity after a winning streak, so one bad trade wipes out many good ones.<\/li>\n<li><strong>Ignoring your target.<\/strong> The trade hits your target, but you stay in, hoping for more, and watch it reverse.<\/li>\n<li><strong>Revenge trading.<\/strong> After a loss, you jump into a quick trade to recover the money. This is greed and fear working together.<\/li>\n<li><strong>Averaging down on a losing trade.<\/strong> Adding to a falling position because you&#8217;re sure it will bounce, with no plan to support that belief.<\/li>\n<\/ol>\n<h2><strong>A Real Example<\/strong><\/h2>\n<p>In February and March 2020, as COVID-19 spread, the Nifty 50 fell by more than a third in about a month.\u00a0Fear was everywhere, and many investors sold near the bottom.<\/p>\n<p>The index then recovered steadily and reached new record highs by November 2020.Traders who sold in panic locked in their losses. Those who had a plan and a position size they could live with were able to stay calm.<\/p>\n<p>The market&#8217;s direction wasn&#8217;t the difference. How each person managed their emotion was.<\/p>\n<h2><strong>How to Read Market Mood: India VIX and the Market Mood Index<\/strong><\/h2>\n<p>You can also measure the crowd&#8217;s emotion, not just your own.<\/p>\n<p><strong>India VIX<\/strong> is a volatility index published by NSE. It reflects how much movement traders expect in the Nifty over the near term, based on Nifty option prices.<\/p>\n<p>A rising VIX means rising uncertainty and fear. A very low VIX can mean the market is complacent. It is often called the market&#8217;s &#8220;fear gauge&#8221;.<\/p>\n<p><strong>Market Mood Index (MMI)<\/strong> is a sentiment indicator offered by Tickertape. It scores investor mood from 0 to 100 using several market factors, including volatility.<\/p>\n<p>Approximate zones:<\/p>\n<table>\n<tbody>\n<tr>\n<td><strong>MMI Score<\/strong><\/td>\n<td><strong>Zone<\/strong><\/td>\n<td><strong>What it suggests<\/strong><\/td>\n<\/tr>\n<tr>\n<td>Below 30<\/td>\n<td>Extreme Fear<\/td>\n<td>Pessimism is high; markets may be oversold<\/td>\n<\/tr>\n<tr>\n<td>30 to 50<\/td>\n<td>Fear<\/td>\n<td>Caution in the market<\/td>\n<\/tr>\n<tr>\n<td>50 to 70<\/td>\n<td>Greed<\/td>\n<td>Optimism in the market<\/td>\n<\/tr>\n<tr>\n<td>Above 70<\/td>\n<td>Extreme Greed<\/td>\n<td>Markets may be overheated; be careful with fresh positions<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Zone boundaries differ slightly between platforms, so check the definition on the platform you use.<\/p>\n<h4><strong>Note:<\/strong><\/h4>\n<p>These tools show mood, and not the future. Extreme readings have often appeared near market turning points.<\/p>\n<p>But they can stay extreme for a long time.\u00a0Use them as context alongside your own analysis and risk rules, never as a standalone buy or sell signal.<\/p>\n<h2><strong>How to Control Fear and Greed: 7 Practical Steps<\/strong><\/h2>\n<p>You can&#8217;t switch emotions off, but you can build a system that limits the damage they do.<\/p>\n<ol>\n<li>Write a trading plan<\/li>\n<li>Fix your risk per trade<\/li>\n<li>Decide your stop-loss and target before you enter<\/li>\n<li>Use position sizing, not guesswork<\/li>\n<li>Set daily limits<\/li>\n<li>Take a break after a loss<\/li>\n<li>Keep a trading journal<\/li>\n<\/ol>\n<p>After a few weeks you&#8217;ll see your own patterns, such as &#8220;I cut winners early on Mondays&#8221; or &#8220;I overtrade after a green morning&#8221;.\u00a0You can&#8217;t fix what you haven&#8217;t noticed.<\/p>\n<h2><strong>Common Mistakes to Avoid<\/strong><\/h2>\n<ul>\n<li>Trading without a written plan<\/li>\n<li>Risking a large part of your capital on one trade<\/li>\n<li>Moving or removing your stop-loss<\/li>\n<li>Increasing position size after wins or losses<\/li>\n<li>Taking trades just to &#8220;do something&#8221;<\/li>\n<li>Treating sentiment indicators as guaranteed signals<\/li>\n<li>Ignoring your journal<\/li>\n<\/ul>\n<h2><strong>Conclusion<\/strong><\/h2>\n<p>Fear and greed are the two emotions that cause most bad trading decisions.\u00a0You can&#8217;t remove either emotion. But you can learn to recognize them and stop them from making your decisions.<\/p>\n<p><span style=\"font-weight: 400;\">This tutorial is for educational purposes only and does not constitute investment or trading advice.<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td colspan=\"2\">\n<p style=\"text-align: center;\"><b>Also Read<\/b><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td colspan=\"2\">\n<p style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/explore\/stock-market\/trading-psychology\/\" target=\"_blank\" rel=\"noopener\"><b>Trading Psychology<\/b><\/a><b>\u00a0<\/b><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/explore\/stock-market\/straddle-and-strangle-strategy\/\" target=\"_blank\" rel=\"noopener\"><b>Straddle and Strangle Strategy<\/b><\/a><\/p>\n<\/td>\n<td style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/explore\/stock-market\/option-greeks\/\" target=\"_blank\" rel=\"noopener\"><b>Option Greeks<\/b><\/a><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/explore\/stock-market\/call-and-put-spread-strategy\/\" target=\"_blank\" rel=\"noopener\"><b>Call and Put Spread Strategy<\/b><\/a><\/td>\n<td>\n<p style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/explore\/stock-market\/ratio-spread-options-strategy\/\" target=\"_blank\" rel=\"noopener\"><b>Ratio Spread Options Strategy<\/b><\/a><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/explore\/stock-market\/exponential-moving-average-ema\/\" target=\"_blank\" rel=\"noopener\"><b>Exponential Moving Average (EMA)<\/b><\/a><b>\u00a0<\/b><\/p>\n<\/td>\n<td style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/explore\/stock-market\/pivot-points-trading\/\" target=\"_blank\" rel=\"noopener\"><b>Pivot Points Trading<\/b><\/a><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/explore\/stock-market\/candlestick-chart-basics\/\" target=\"_blank\" rel=\"noopener\"><b>Candlestick Chart Basics<\/b><\/a><\/td>\n<td>\n<p style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/explore\/stock-market\/adjusting-option-selling-strategies\/\" target=\"_blank\" rel=\"noopener\"><b>Adjusting Option Selling Strategies<\/b><\/a><b>\u00a0<\/b><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/explore\/stock-market\/swing-trading-technical-strategies\/\" target=\"_blank\" rel=\"noopener\"><b>Swing Trading Technical Strategies<\/b><\/a><b>\u00a0<\/b><\/p>\n<\/td>\n<td>\n<p style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/explore\/stock-market\/introduction-to-swing-trading\/\" target=\"_blank\" rel=\"noopener\"><b>Introduction to Swing Trading<\/b><\/a><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n","protected":false},"excerpt":{"rendered":"<p>Fear makes you exit good trades too early or avoid them completely. Greed makes you chase profits, take oversized risks and ignore your plan. What are Fear and Greed in Trading Fear in trading is the urge to avoid or escape loss. It shows up as panic selling hesitating at a valid entry closing a [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":0,"template":"","meta":{"_acf_changed":false},"curriculum-category":[111,112,157],"custom_linking_tags":[],"class_list":["post-2373","curriculum","type-curriculum","status-publish","hentry","curriculum-category-stock-market","curriculum-category-stock-market-tutorials","curriculum-category-trading-psychology-emotions-and-risk-management"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Fear and Greed in Trading - Entri Free Materials<\/title>\n<meta name=\"description\" content=\"Here is all you need to know about the two negative drives in trading - fear and greed - the beginners&#039; basics.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/entri.app\/explore\/stock-market\/fear-and-greed-in-trading\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fear and Greed in Trading - 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