5 Fears traders have and how to solve them
Dear Traders,
Trading fears are not the sole domain of new traders, actually far from it. Fear can hit at any time, even effecting long standing professional traders. The main problem about trading with fear, is that it can affect your trading and it can happen at any time. Remember, fear is a symptom not a cause. Have you ever experienced that you consistently make some money in the markets while trading with a low risk, but as soon as you increase the stakes it all goes awry? Here is a list of 5 trading fears that traders face during their trading day.
1.Making wrong decisions
That is how we all start our trading careers. We made a few bad decisions here and there, and it didn't show well on our trading account. Sometimes those decisions can be more disastrous than others and we can accrue a negative feeling about being wrong. These negative feelings can cloud our judgement and it can cause what is known as analysis by paralysis, which I have covered in numerous psychology webinars. Remember, our focus on making the "right" decision can also lead to paralysis because the trade options that we need to choose from are difficult to rank in the first place.
2.Margin call
We are here to make money, not lose it. But as any other investment profession it bears a risk of losing your investment. In order to make money we need to stack odds in our favor. We need to have an edge. If you can't understand the tripod of successful trading, then you stand no chance. You need to have a proper information about your system, money management and psychology. Without it you will lose, sooner or later. Remember, even the best traders have losses but the difference is that they have overcome their trading fears successfully.
3.Missing out
A wish for success and to make pips will always motivate us to work at something, but if we become too greedy then we will start doing things that we normally wouldn't. If you are too greedy you will make revenge trades, jumping onto a freight train and holding onto positions much longer than your system tells you. For example, how many times were you tempted to make a trade based on your inner feeling even though your system told you not to do so? Have you ever been buying at resistance or selling at the support?
4. Giving back profits
Whenever you are in a profit you start to think about exiting a trade. You do whatever it takes just to secure your profits and you cut your winners short. Protecting your profits is a great thing but letting your losses run or cutting your profits short is something which you should always avoid. This type of fear is connected to your past experience. The more you lost, the greater your fear of giving back profits. It is like a pandemonium, and in the long run it will not make you a winning trader.
5. Unable to control the market
This is one of the biggest concerns of a newbie trader. There are many things we cannot control in our life. All investments have risks and the risk is always present in all aspects of life. Do you have a control over EURUSD exchange rate? Are you able to control inflation? The answer to both questions is - no. However if you know how to plan your trades and you have the right tools you will minimize the risk and stack the probabilities in your favor.
You can watch this video for an overview of ways to control your fear and tips on how to become a confident trader.
Have you ever experienced any type of fear we have not mentioned? If you have, please let us know in the comments section below.
Cheers and good trading,
Nenad and Chris
