The Twin Engines: Why Greed and Fear Are Absolutely Necessary

April 04, 2026 | By the trading job


Open any trading book or listen to any financial guru, and they will tell you the exact same thing: "You must eliminate greed and fear from your mind." They talk about greed and fear as if they are diseases that need to be cured. But here is a deeper, more controversial truth: Greed and Fear are the twin engines that drive the entire stock market, and life itself. Both are absolutely necessary. If one is missing, the system simply stops working.

To understand why, you don't need to look at a complex financial model. You just need to walk into a local garment shop.

The 30% Off Trap: The Anatomy of a Transaction

Imagine a popular clothing store puts up a massive banner outside their shop: "FLAT 30% OFF!" This is the first engine: Greed. The customer looks at the sign and realises they can get a premium shirt for a much cheaper price. The human brain naturally desires more value for less money.

But what if that is the only sign on the window? If the 30% discount is permanent, the customer will look at it and say, "That's a great deal. I don't really need a shirt today, but I will come back next month when I get my salary and buy it." Because there is no urgency, they walk away. The shopkeeper makes zero sales. Greed alone is not enough to force a human being to take immediate action.

To make the sale, the shopkeeper must activate the second engine: Fear.

So, the shopkeeper changes the banner. It now reads: "FLAT 30% OFF — VALID FOR 7 DAYS ONLY OR TILL STOCKS LAST!"

Instantly, the psychology of the crowd changes. The 30% off still triggers their Greed, but the time limit and the threat of limited supply trigger a massive amount of Fear (Specifically, the Fear Of Missing Out, or FOMO). Now, the customer thinks, "If I don't buy this shirt right now, the time will run out, or someone else will buy my size, and I will be forced to pay the full price later." They don't even need the shirt today, but the combination of Greed and Fear forces them to pull out their wallet and buy it immediately.

Entering the Trade: The Rush to Buy

When you sit in front of your screen and watch the charts, you are watching the exact same garment shop psychology play out on a massive, global scale.

Why do millions of people suddenly rush to buy a stock on a Tuesday morning?

  • The Greed: The stock has corrected to a strong support level, or it is breaking out of a pattern. The trader sees the potential for a massive profit. They see the "Discount" sign.

  • The Fear: The price action is moving fast. The trader's heart starts racing. They think, "If I don't hit the buy button right this second, it will gap up tomorrow (time is running out), or all the available volume will be bought up by institutions (till stocks last), and I will miss the rally!" Without the greed of profit, no one would risk their capital. Without the fear of missing the move, no one would execute the trade today.

Exiting the Trade: The Rush to Sell

But these twin engines don't just push you into a trade—they are also the exact same forces that push you out of a trade, often at the worst possible time.

Imagine an amateur trader buys a stock, and within a few days, it goes up by a small percentage, say 5%. Suddenly, the twin engines fire up in reverse:

  • The Greed: They see the green numbers on their screen, and the greed for instant gratification kicks in. They want to lock in that profit today so they can feel like a winner and put the money in their pocket.

  • The Fear: They stare at the screen, terrified. "What if the market crashes tomorrow? What if this small profit turns into a loss by next week?" Driven by the greed to secure a quick win and the fear of losing it tomorrow, they hit the "Sell" button and exit the trade entirely. A few months later, that same stock goes up 200%, and they missed the entire trend because they couldn't handle the psychological pressure of holding a winning position.

The Professional's Edge

Amateur traders are the victims of these twin engines. They rush to buy out of FOMO, and they rush to sell out of panic.

Professional traders understand that Greed and Fear are just tools. They do not let these emotions control their own clicking finger. Instead, they use their charts to map out exactly where the retail crowd's Greed and Fear will peak, and they use that predictable human behaviour to enter and exit their own trades profitably.

The market is a psychological battlefield. Recognise the "till stocks last" sale when you see it, stick to your tested system, and don't let the shopkeeper—or your own emotions—rush your decisions.

- the trading job