10 REASONS for Impulse Trading

by | Apr 20, 2023

If you have any tendencies to take impulsive trades.

I urge you to STOP trading.

Seriously. It’s the most dangerous tendency to have.

It’s like starting a bad habit, thinking it’s going to be temporary.

It doesn’t end.

It gets worse, it becomes obsessive and before you know it – It’s your life.

So read this article, stop trading, prepare your mind and STOP impulse trading today.

Your financial future depends on it.

But now we need to ask, WHY do so many traders impulse trade?

Each individual has their innate reasons, but I’m happy to share a few that I can think of.

REASON #1: Chances are 50/50 to win or lose

One of the reasons traders make impulsive decisions is the belief that the odds of winning or losing are 50/50.

This simplistic view of probability can lead to overconfidence and hasty decisions.

Either you win or lose!

Combine ego and belief – and you’ll feel the chances are way higher – because you “know better”.

Trading is a longevity game, not a one day venture to beat the market.

That is like going to a Casino with such a ridiculous mind.

You’re better than that. You’re mature and you’re smart – or you wouldn’t be a MATI Trader.


REASON #2: Feels right

Emotions play a significant role in financial trading, and sometimes, traders rely on their gut feelings to make decisions.

The belief that a trade “feels right” can lead to impulsive actions, as traders may not take the time to analyze data and trends thoroughly.

For example.

I lost because I went short and then market went up. So this time I will just go long and with the market.

Nope! Doesn’t work like that. The market zigs and zags. And when it zags (in a sideways range) – it stops out traders.

And when you don’t follow your rules and strategy – sure you might win now and then – but in the long run, it’s inevitably going to blow up in your face and account.


REASON #3: Get in quick to profit

The fear of missing out (FOMO) is a powerful motivator in financial trading.

Traders may see others profiting from a particular stock or asset and, in an attempt to ride the wave of success, impulsively jump in without conducting proper research.

You might have in your mind the simple

“I’m just going to get in for a few minutes, let the market move in my favour and I’ll be out”.

Sounds emotional, sounds discretionary and sounds stupid.

Nothing more to report on this idiocracy.


REASON #4: Make up for the losses

When traders take losses, they have the urge to get right back into the market.

Go the opposite direction to their previous trade – and “make up for their losses”.

They just can’t handle a loss in the day.

They just can’t handle having less money than what they started with.

RED FLAG! You’re not ready to trade.

You’re going to take more impulse and emotional trades, without a doubt.

And that’s why you need to stop this attempt to recoup losses, try end up positive for the day and beat the market.

You need to realise… The market is all about probabilities. So if the environment isn’t favourable to your strategy, it’s not going to serve you in the next day or two.

You just need to take the losses (small I hope), man up or woman up and take the next trade when it lines up.

You are going to have losing days, weeks and even months – that’s just how it goes. So adapt the losses into your trading until they become second nature to help grow your portfolio.

Then there are other reasons you might take impulse trades.

Such as…

REASON #5: Overconfidence

Some traders may believe they possess superior skills or knowledge and make hasty decisions without fully understanding the risks involved.


REASON #6: Lack of a trading plan

Without a clear plan, traders may be more prone to making impulsive decisions based on emotions rather than logic.

REASON #7: Inexperience

Novice traders may lack the knowledge and experience needed to make informed decisions and may therefore be more susceptible to impulsive trading.


REASON #8: Herd mentality

Traders may follow the actions of others (in the news, media, or other traders), making impulsive trades to avoid being left behind.

Social media platforms can also amplify your emotions which will result in you taking unnecessary trades.  

REASON #9: Boredom

In slow market conditions, traders may make impulsive trades because they are just plain bored.

And they want to feel the sense of purpose or accomplishment.

Do yourself a favour and close your computer and go out in nature and reflect on your day.

Don’t take a trade when you are BORED unless the market has lined up a perfect high probability trade setup according to your strategy.

REASON #10: News related event

When a high impact news event comes out much better or worse than expected.

This is when traders like to just take the logical approach of buying or selling the main indices.

And then they end up taking more losses and bigger losses than they thought.

WHY? Because high impact news events bring upon high volatility, uncertainty and big jumps in the market.

Also, it will heighten your emotional aspect, raise your stress and anxiety levels.

Trading should not provoke your emotions. And if they do, you got some work to do.

Hence, I say, trading is Markets, Methods, Money and MIND!

Find the problem, acknowledge it – then solve it…

If you can relate to this article, let me know!

Trade well, live free.

Timon Rossolimos
Founder, MATI Trader


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Trade well, live free.

Timon Rossolimos

Founder, MATI Trader



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