Emotional trading, driven by fear and greed, often leads to impulsive and irrational decisions. For instance, the "fear of missing out" (FOMO) can tempt traders to jump into a position that has already made a large move, leading to them buying at a peak right before a correction.

Conversely, fear of a small loss can prevent a trader from exiting a position, causing a small loss to turn into a large one. It's crucial to learn how to manage these emotions. When a loss occurs, it's essential to accept it as a normal part of trading and avoid "revenge trading"—the act of making impulsive, larger trades to try and immediately recover your losses.

Instead, successful traders develop a growth mindset, viewing every trade, whether a win or a loss, as an opportunity to learn and refine their strategy.