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Psychological traps in trading: Octa Broker’s perspective on avoiding costly mistakes
Psychological traps in CFD trading
Psychological traps consist of cognitive bias and emotional responses that negatively affect trading decisions. Cognitive bias compels traders from their strategy, potentially undermining their results. Notably, such traps are not exclusive to novices. Experienced traders are not immune to them either, especially when the market is volatile.
Emotions are powerful forces in trading. They can override rational analysis, prompting impulsive behaviour and unwise actions. Empirical findings in trading psychology indicate that investors frequently succumb to fear and greed, two emotions that can cloud their decision-making, potentially resulting in suboptimal profits or, more severely, significant losses.
Understanding 6 common psychological traps in CFD trading
- Fear of missing out (FOMO) drives traders to enter positions based on the anxiety of missing potential profits, often influenced by market hype or social media trends. This behaviour can lead to buying at peak prices without proper analysis. FOMO-driven traders may trade excessively, believing that more trades will increase their chances of hitting a winning opportunity.
- Revenge trading. After incurring losses, some traders attempt to recover quickly by making impulsive trades without adequate analysis. This often exacerbates losses and deviates from disciplined trading plans.
- Overtrading. A situation when traders try to always be active in the market and take positions without clear signals or strategies. This impatience can result in increased transaction costs and exposure to unnecessary risks.
- Gambler’s fallacy involves believing that a series of losses or gains will be naturally followed by the opposite outcome. Driven by the anticipation of an imminent reversal, traders may prematurely try to ‘pick a top’ during a bullish trend or ‘find a bottom’ in a bearish trend, often without sufficient evidence.
- Hope vs. strategy means holding onto losing positions, believing that the market will turn in their favour, despite evidence to the contrary. This can lead to significant losses as traders ignore stop-loss rules and objective analysis.
- Herd mentality implies mimicking the crowd by following others’ trades without analysis. Herd behaviour may form bubbles or exacerbate market downturns, leading traders to buy or sell too early.
Spotting the signs—when you’re not thinking straight
Be mindful of the sudden impulses to deviate from your trading plan, especially after winning or losing a lot. A shifted risk tolerance, such as opening positions that are unusually large, can be a sign of emotional trading. Other behavioural red flags include:
- ignoring predetermined stop-loss levels
- doubling down on losing positions
- frequently changing strategies without thorough evaluation.
Recognising these signs is the first step in regaining control and preventing emotion-driven decisions. Here are other tips to stay in control when trading:
- Plan before trading. Develop a comprehensive trading plan that outlines entry and exit points, risk tolerance, position sizes, and adhere to it
- Journal your trades to record your progress and monitor your emotional state. This helps identify patterns in behaviour and improve self-control.
- Use stop-loss and take-profit orders to automate discipline, ensuring that decisions are executed as planned, even in volatile markets. Given the high-risk nature of CFDs, such controls are vital
- Learn from mistakes. Regularly review your trading history to understand what worked and what didn’t. Reflecting on past errors fosters growth and helps in refining strategies
- Step away when needed. Taking breaks from trading, especially after a series of losses or even wins, can provide perspective and prevent burnout. As Kar Yong Ang, a financial analyst at Octa Broker, advises: ‘Your worst trades often come when you feel most confident—or most afraid. Mastering trading psychology is what separates short-term reaction from long-term resilience.’
While technical ability and market knowledge form the foundation of trading, psychological discipline determines long-term success. Even a valid strategy can be undermined by emotional biases. By recognising common psychological traps and implementing measures to negate them, traders can improve their decisions and perform more consistently. Constant self-monitoring, deliberate discipline, and emotional mastery are key factors in navigating the complex psychological landscape of trading.
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Disclaimer: This content is for general informational purposes only and does not constitute investment advice, a recommendation, or an offer to engage in any investment activity. It does not take into account your investment objectives, financial situation, or individual needs. Any action you take based on this content is at your sole discretion and risk. Octa and its affiliates accept no liability for any losses or consequences resulting from reliance on this material.
Trading involves risks and may not be suitable for all investors. Use your expertise wisely and evaluate all associated risks before making an investment decision. Past performance is not a reliable indicator of future results.
Availability of products and services may vary by jurisdiction. Please ensure compliance with your local laws before accessing them.
Hashtag: #Octa
The issuer is solely responsible for the content of this announcement.
Octa
Octa is an international CFD broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services used by clients from 180 countries who have opened more than 52 million trading accounts. To help its clients reach their investment goals, Octa offers free educational webinars, articles, and analytical tools.
The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.
In Southeast Asia, Octa received the ‘Best Trading Platform Malaysia 2024’ and the ‘Most Reliable Broker Asia 2023’ awards from Brands and Business Magazine and International Global Forex Awards, respectively.
The collaboration will see 0xmd bring its cutting-edge AI technologies to Brazil, including solutions for automated clinical exam analysis, medical image interpretation, and conversational diagnostic support. This partnership positions 0xmd as the first international healthtech to integrate with CIMATEC’s innovation ecosystem.
With existing operations in the United States and China, 0xmd aims to contribute to the democratization of healthcare access in Brazil by providing intelligent tools that support medical professionals in diagnosis, treatment planning, and personalized care. A key differentiator of 0xmd’s technology is its use of medical and healthcare large language models with natural language interfaces, such as clinical chatbots, that facilitate seamless interaction between healthcare providers and decision-support systems.
“Partnering with SENAI CIMATEC enables 0xmd to localize its solutions for the Brazilian market and scale its impact in the region,” said Allen Au, Chairman & Chief Architect of 0xmd. “SENAI CIMATEC’s strong reputation in innovation and research makes it an ideal partner to help us navigate the Brazilian healthcare landscape and ensure the successful integration of our technology.”
The initial phase of the project will focus on adapting 0xmd’s technology to Brazilian regulations and integrating with local healthcare systems. The partnership also aligns with the growing demand for AI solutions in the healthcare industry, particularly in areas such as image-based diagnostics, clinical report automation, and personalized therapies.
The partnership with SENAI CIMATEC reinforces 0xmd’s commitment to expanding its global impact and driving innovation in healthcare.
Hashtag: #0xmd
The issuer is solely responsible for the content of this announcement.
About 0xmd
0xmd Inc. is a pioneer in Generative AI healthcare solutions platform based in Hong Kong China and the US, specializing in Large Language Models (LLMs) and Large Visual Language Models (LvLMs) designed for medical applications. 0xmd is capable of providing 24/7 online diagnostic support that integrates both Western Medicine and Traditional Chinese Medicine, automation of clinical exam analysis, medical image diagnostics, as well as total health management solutions. The company is dedicated to transforming the healthcare landscape by optimizing healthcare systems, in order to make healthcare resources more equitable and accessible.
About SENAI CIMATEC
SENAI CIMATEC is Brazil’s leading technology and innovation center, comprising a Technological Center, a University, and a Technical School that operate in synergy. Established in 2002, it is a private, non-profit institution dedicated to Research, Development, and Innovation (RD&I), focusing on delivering advanced solutions to the industry. With expertise in 43 areas—including robotics, quantum computing, AI, energy, and sustainability—SENAI CIMATEC is committed to driving technological advancements to meet the evolving market needs. The institution develops and implements projects with national and international impact, collaborating with renowned institutions and partners worldwide.
https://linktr.ee/senaicimatec_oficial
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Tenchijin Inc. Announces Partnership with PWS in Malaysia for KnoWaterleak Distribution
This strategic partnership combines Tenchijin’s innovative satellite-based water leak detection technology with PWS’s extensive network and expertise in the Malaysian water sector. PWS, which currently serves as the exclusive distributor for global industry leaders such as Diehl, Nivus, and Aichi Tokei, will leverage its established relationships with major water utilities to accelerate the adoption of KnoWaterleak throughout Malaysia.
Strategic Partnership Benefits
The collaboration aims to address critical water infrastructure challenges in Malaysia through:
– Integration of KnoWaterleak’s satellite-based monitoring system with existing water management infrastructure
– Enhanced leak detection capabilities for water utilities across the three regions
– Improved water conservation and infrastructure maintenance efficiency
Executive Comments
Yohei Nishiyama – VP of Business Development, Tenchijin Inc | Japan
“Our partnership with PWS represents a significant milestone in our expansion into Southeast Asia. Malaysia’s commitment to water infrastructure modernization perfectly aligns with our mission to revolutionize water management through space technology. Through this collaboration, we aim to demonstrate how satellite technology can transform the way we manage and conserve water resources. This partnership will not only benefit the Malaysian water sector but also serve as a model for sustainable water management across Southeast Asia.”
Mr. Desmond Lim, Managing Director, Premier Water Services
“PWS recognizes the transformative potential of KnoWaterleak’s technology for Malaysia’s water utilities. This partnership strengthens our portfolio of innovative solutions and reinforces our commitment to advancing water infrastructure management. By combining our extensive network and expertise with Tenchijin’s cutting-edge satellite technology, we are confident in our ability to deliver unprecedented value to water operators across Johor, Selangor, and Penang. This collaboration marks a new chapter in Malaysia’s journey towards smarter, more efficient water management systems.”
Market Implementation
The initial rollout will focus on:
– Comprehensive coverage of water networks in Johor, Selangor, and Penang
– Integration with existing water management systems
– Technical support and training programs for local utilities
Hashtag: #Tenchijin #KnoWaterleak #SatelliteTechnology #WaterLeakage #Sustainability #LeakageDetection
https://tenchijin.co.jp/?hl=en
https://knowaterleak.space/
For inquiries regarding the expansion of Tenchijin COMPASS KnoWaterleak in Asia, please contact the following:
Asia Business Development Div.
Contact: asia-t@tenchijin.co.jp
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Sahm App Version 2.0 Introduces Dark Mode and Major Feature Upgrades to Empower Users
Designed in response to community feedback, Dark Mode offers improved visibility in low-light settings while reducing eye strain—delivering a smoother, more comfortable trading experience. With vibrant, high-contrast interactive elements, users can now enjoy a bold new interface. The feature can be enabled in Sahm App Version 2.0 via Settings > General, where users can choose Light, Dark, or follow their device’s system settings.
But Version 2.0 goes far beyond aesthetics. With over 250 upgrades, the update transforms Sahm App into a smarter, faster, and more connected trading platform. Key enhancements include:
- Concept Stocks: Themed investment ideas to help users track trends and sector movements in U.S. markets at a glance.
- Smart Search: A redesigned search experience offering faster, more accurate results based on trading behavior.
- Real-Time Stock Comments: Live discussion threads where over a million investors exchange ideas, market insights, and strategies.
- Refreshed News Layout: An improved interface for browsing financial news—clearer, more structured, and easier to navigate.
Hadeel Bedeeri, General Manager of Sahm Capital, shared: “At Sahm, we put our users at the center of everything we do. Version 2.0 is not just an update—it’s our statement of intent. We’re giving every investor smarter tools, faster access, and a better way to trade with confidence.”
With a refined design and community-driven features, Sahm App 2.0 reinforces its mission to be the most intuitive and trusted trading platform in the region. The app is now available on the iOS App Store, Google Play Store, and Huawei AppGallery. New users can also enjoy a lifetime 70% discount on Saudi market commissions, capped at a maximum of SAR 3 per trade. For more information, visit: https://www.sahmcapital.com
About Sahm App:
Developed by Sahm Capital, licensed by the Capital Market Authority (CMA), the Sahm App is a trading platform tailored for investors in Saudi Arabia. It provides seamless access to both the Saudi and U.S. markets within a secure, regulated environment. With its intuitive interface and advanced investment tools, the app has quickly become one of the top three in the Free Finance category on Google Play, with more than one million users.
Hashtag: #SahmCapital #CMA#Tadawul
https://www.sahmcapital.com/
www.sahmcapital.com
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