Jakarta, CNBC Indonesia – Stock trading is clearly different from investing because the aim of trading is to increase income, while investment is not only about increasing income, but is also a process of asset accumulation.

Trading is considered more suitable for aggressive risk profiles, because it is carried out in the short term and often takes advantage of market fluctuations. And this often triggers emotions when making transactions.

When emotions influence buying and selling decisions, the trading strategy may not be in accordance with the trading plan that has been prepared.

For example, a trader may rush to sell a stock even though the price has just risen slightly or fallen slightly. This can result in income from trading and investment portfolio growth not being optimal.

So, how do you control your emotions when trading? Here are some tips:

Start with Small Capital

It is important to start trading with small capital or with an amount that you can accept if you experience a loss. There are no standard rules about how little capital should be used, because each individual has a different risk tolerance. For example, imagine if stock prices fell by 40%.

Let's just say, with capital of IDR 100 million, this means the potential loss could reach IDR 40 million. Consider whether you would still be comfortable with such a large loss in the stock market.

If the answer is no, then adjust the amount of capital used until you feel comfortable with the level of risk faced. Also make sure that the capital used is money that will not disrupt your finances in the near term, not money from loans.

By starting with small capital and using money that is not urgent, you can keep your trading emotions under control, so that buying and selling decisions can be taken objectively and in a planned manner.

Think of this whole process as learning

One of the keys to success in trading is to focus on learning so you can maximize profits while minimizing risk. Remember that the stock market is open every working day, so there is no need to rush in making decisions because there is always an opportunity to make a transaction.

Instead of immediately buying and selling, take the time to study price movement patterns when shares decline. Thus, you can identify the right momentum to enter or exit the market.

Don't rush to take profits, stay calm and observe market conditions. Is the uptrend still continuing or has it reached its peak?

Use Technical Analysis

When trading, it is important to understand technical analysis to predict the next stock price movement. By understanding technical analysis, you can determine ideal entry and exit points based on chart patterns and technical indicators.

For example, you can pay attention to resistance areas as potential points to take profits. Resistance is the highest price level that tends to experience selling pressure, so the stock can reverse downwards after reaching this level.

On the other hand, if the stock experiences a breakout from the support level, then this could be a signal to limit risk, because the stock price has the potential to continue its decline. By following these principles, you can increase emotional control when trading and make sound buying and selling decisions. more focused and rational.

[Gambas:Video CNBC]

(aak/aak)