Emotional trading will destroy your portfolio if you let it: Veteran trader

Key Points

  • Emotional trading can lead to significant losses, according to veteran trader Kenny Polcari.
  • The market moves based on fundamentals, not on investors' feelings or emotions.
  • JPMorgan forecasted a recession in 2025, increasing the likelihood of market downturns.
  • Strategic, disciplined trading is recommended over impulsive decisions driven by market euphoria or panic.

Summary

In the latest episode of Trader Talk, host Kenny Polcari discusses the dangers of letting emotions drive investment decisions, especially in light of potential economic downturns. He emphasizes that the market operates on fundamentals like earnings and economic data, not on investors' feelings. Despite the looming threat of a recession, with JPMorgan predicting one in 2025 and Yardeni Research raising its odds to 45%, Polcari advises traders to stick to a disciplined strategy. He warns against the common pitfalls of chasing market momentum or panicking during downturns, which can lead to significant financial losses. Polcari stresses the importance of setting clear entry and exit points and maintaining a calm, analytical approach to trading. This approach, he argues, is crucial for long-term success in the increasingly unpredictable US market, where external factors like tariffs, inflation, and government spending cuts are also at play.

yahoo
April 5, 2025
Stocks
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