Anger is a complex emotion. It relates to the perception that we have been wronged. Our boundaries have been violated. Our expectations about how the world should be have not been met. Contrary to anxiety, anger makes us feel that we have control over outcomes. For that reason, angry traders are more optimistic, confident of their position and more comfortable with risk as well. They may hold on to a losing position because of certainty, or take riskier trades because they want to get back at the market for a previous loss.
Anger often works as a display emotion for other deep seated emotions such as shame or guilt.
For example, a trader may be feeling embarrassed for having been wrong previously. The possibility of being wrong again would bring about feelings of shame and personal inadequacy, so he gets “angry” at the market and decides to “attack it” with a bigger trade.
If you carefully think about it, before you feel angry, you always feel another emotion before. This is mostly an automatic mental process so we do not realise it happens.
But the truth is that anger is secondary and that we may use it to protect ourselves from feelings that make us feel vulnerable (such as fear, humiliation, embarrassment, hurt, rejection etc).