Do you have fear of blowing your account? Are you feeling upset to take a risk-on your trade? Are you failing to control your emotions while trading?
Off course !! yes.
Our mindsets are not free from such horrible fears.
These fears interrupt our trading strategies.
How fears affect our trading? And how you can handle the fear of making losses?
This post will focus on all the fear-related issues and how to solve these fear-creating problems.
If you are unable to make a trading plan in a depressive market scenario. You really want to know:
How to overcome trading fear? There are many ways to overcome trading fear. Having a trading strategy, minimizing the trade size, keeping a trading record, learning from others, and sticking to your trading plan is the key to overcome your trading fears.
Every trader in stock wants to walk on a safe track. Nobody likes to afford losses. To secure profit, they miss the profit gaining trade. Fear of being a loser never leads people to make a perfect trading scheme. Which results in confused trades.
Scroll down to overcome your unknown trading phobias:
How To Overcome Trading Fear
While trading, the main emotions that arise are the main restrictions to handle. Such fears are not real but they ruin most of the traders. These may prove a threat to trade. In trading, the threat is not real but a self-made imagination.
The thing to understand is the reality of the threat which leads you to make wrong decisions.
When you are entering the market, you have to face different types of fear. These fears may interrupt your trade badly. Your planning disturbed due to the fear of being a loser. But when you make progress in your trade, you feel that fear is a push-up force for you to go ahead.
5 Most Common Trading Fears
Five trading fears can hit your mind while putting trade in the forex. Arising fear is a type of pressure affecting your strategy.
Often, brokers and marketers try to feel that trading is an easy game. You just purchase, the price goes up and you sell.
Let’s try to solve the secrets of these 5 trading fears:
1-Fear of Being Wrong
As our educational roots train us, the concepts of wrong and right. Our brought-ups are lying in rewards and punishments. Student’s life passes on avoiding being wrong. This trend of doing right put you in defending mood.
This fear of being wrong stops your learning.
Every trader wants to play on the safe pitch. He tries to avoid no balls like stop-loss orders.
70% correct means that your losses are higher than that of your wins.
One winning trade returns you 1 dollar.
One losing trade cost you 3 dollars.
Suppose out of 7 trades you have lost 3 trades. All you gain is 3 dollars.
Correlation of trader’s success% to profit = zero
Correlation of traders IQ to success = zero
In the trading zone, only a few outstanding businessmen are too intelligent.
Many of them are dangerous traders.
For trading, average intelligence is too much. In the background, emotional psychology works critically. If you control your emotional feelings and manage risk, you are a winner in trade.
2-Unknown Type of Fear
If you fail to know your expecting losses, you are just a gambler in the market.
Unknown market pressures make your emotions out of control if the price goes opposite to your trade. Such situations make you alone and helpless.
Traders can’t justify the future of the price. Now their so-called fears. This is because of the lack of proper knowledge about trading projects.
Surprisingly, newbies are aggressive towards these unknown fears. Because brokers show them a bright future of trades. However, the reality is cruelty.
Most traders like to jump in the forex due to no boundaries of the boss, without physical struggle and feel comfortable with a mouse click. But the secrets behind scenes are even less talkative and out of proper publicity.
Understand all about the trade is a better way to overcome the fear of the unknown. Relative trading courses and trading books are available to increase trading knowledge.
3-Fear of Missing Out
Think for a moment that you have been waiting for a luxury apartment for the longest ago. Suddenly you notice an advertisement for selling that apartment on an urgent basis.
Now, what would be your decision?
I bet you will run at to purchase it without a minute of planning. You never like to miss the chance.
The point is that you have a fear of missing out on your dream. Which makes you avail of the opportunity before it gets away from your access.
Remember this type of fear makes things too bad.
For example, in a long-term trading strategy when the price is going down for a few weeks. Unluckily, you have not availed that trade. But now the price is going up without your entrance.
To handle the fear of missing out, you should go longer at a top higher price. This is the turning time of the market. Keep in your mind that you are unable to get all the movements of the market. The market situations are not in your favour all day. It totally depends on your trading approach.
Traders that follow the trending signals never use the sense of being losers in the stock. They should make a sense of missing out on the up and down of the market.
4-Fear of Losses
Usually, people prefer to avoid losses than getting turnovers. You can say that losses affect you worse than gains make you happy.
People put their all efforts to secure them from losses. On the other hand, you are afraid to take risks inputting your entry for better output.
If you feel fear in taking losses you fail to put your trade. In this way, you avoid cutting your trade in the seek of imaginary loss. Attempting to avoid losses never leads to make the right trading strategy.
When someone fails to overcome the fear of losses, he/she never uses the proper trade at the exact time. Such fear works the behind scenes and paralyzes you. Just like the pigeon’s eyes in the fear of a cat. Plus, you hesitate to put the profit-gaining trades that could make up for losses.
When you are unable to take tiny losses, you will quickly be trapped by the gurus of losses.
5-Fear of Giving Back Turn Overs
Fear of returning profits is another main psychological factor that teases traders.
Honestly speaking, you get an initiative because you feel it is an easy game. In real life, it goes opposite to our thoughts. Although in the early steps of trading, it is normal to face loss.
But whatever small you have earned becomes a headache for you. You always try to secure this small profit. This type of fear depends on your previous losses. The more you lose the more you get afraid. This fear forces you into the streets of unexpected returns.
4 Practical Strategies to Overcome Your Trading Fear
Knowing fear is half-knowledge, you may also need to know strategies to overcome them.
Here are 5 practical strategies that really work to overcome fear. Let’s read out how:
1.Making a Plan before Trading
Uncertainty is a big factor in causing fear. You can’t decrease the chances of uncertainty before jumping into the stock.
Let us get acknowledged before putting your trade:
- Make sure you’re clear about everything before your entrance.
- Trading setups should be well planned.
- Work on your trading assignment.
- A clear understanding of your entry price.
- Better use of stop-loss order.
- How to target the profit.
- Earning skill of trading.
- What should be the volume of your position?
- Concept of $ risk.
After understanding all the above things, you will be near to work in all market conditions. Once you know the anxiety/fear creators, you can put your trades confidently.
Trades either win or lose, you will win to close the chapter of your fears.
2. Tiny Trades
Generally, fear of being a loser and a weak trading plan extend the size of a trade. Once you get oversized you are playing emotionally.
Now you get upset to sell if a small pip goes opposite to your position. Look at the market objectively carry successful trading results.
Tiny trades end your trading fears. As you are not trading emotionally attached accounts.
Tending towards too large enough sized trade brings you into the worthwhile trade. However tiny trade secures you to blow up your small capital account.
3.Focus on What Can You Avoid
While trading, many things are avoidable. Such avoidable are disturbing factors.
Don’t let them affect your strategy.
|Managing Risks||Marketing News Alerts|
|Trading program||Trading Outputs|
|Size of Position||Trading Styles of Other Traders|
|Choosing stock||Movements on Price|
|Trading tactics||Personal PNL|
Trading is a game of chances. Focus on avoidable things. When you bound yourself to a well-practised method, your fear will unable to affect your plan.
4. Putting Your Trade Metrics on Right Track
Out of thousands of well-practised trading strategies, it is impossible to select the earning trade without tracking it in your entry.
How to Understand Tracking Metrics?
It is easy to understand this concept through this example:
A trade has a proven setup of many years of PNL profit breakthroughs.
With a win rate of 80% on this setup. He will get revenue whether he repeats this setup more than 10 times. But other trading buddies can’t execute this plan profitably. When you don’t follow proven plans, your trades go on the long term. In
Trading goes in in uncertain situations. Only a proven setup will earn for you if you track it. Such setups make profits more than 30 times.
How Can I Train My Mind to Overcome Fear?
Oh! I am losing, what to do now!!
In the depressive market conditions, some mental habits are required to
Overcome these fears on your own. Below you can know about these tips:
- Never feel imaginary, just find out the real picture.
- Try to take the avoidable things under your control.
- Be careful about your intentions.
- Never think negatively, be positive.
- Practice a professional approach.
- Don’t judge things on your own behalf.
- Prefer your self-care.
- Develop your mental level to close the fear reaction.
In human life, fears are a part of our life. Our brought-up training is one of the main hurdles in making the right trading decisions.
Such an emotional mindset gets flop in trading strategies. Fears stop people to take risks on trades. Only wise and fearless trades make you a successful player in the stock.
Once you control your fearing emotions, you will be able to stand in a risky position of trading. Which results in getting certain profitable trading setups.
I hope this post will help you to tackle your unknown fears. You will reach the heights of seven skies.