Fear is a natural emotion that all humans experience at various points in their lives. And, because Forex is still a risky business, many new and experienced traders must deal with their trading fears.
Can you get rid of this feeling and become a trader who has no fear at all? Hardly. However, there are ways to lessen the dread and strengthen your resistance to it.
The effect that fear has on traders is worse than the emotion itself since it paralyzes some of them, impairs their quick wits, and influences their judgment.
But, as soon as you can handle your anxieties, you can access new levels of business potential. Everyone who trades will probably suffer several trading phobias. Your fears in trading are one of the biggest hurdles to overcome.
This post shares the two most prominent trading fears that destroy most traders and how you can turn them into an opportunity.
Fear of Loss
Nobody loves to lose. This is an actual fact. In addition, nobody enjoys losing money. However, losses are a part of the reality in the forex market, and even if we cannot prevent them, we can alter how we deal with them.
It is important to be careful but avoiding any risky situation out of fear means passing up countless opportunities to win.
Fear is a part of the trading process, just like taking risks and thinking clearly when making a difficult decision.
So, how do you handle the fear of loss?
- Trade with money you can afford to lose (not money that is required to pay the bills)
- Risk no more than 1% on each trade (you can lose 10 times in a row and still have a manageable drawdown).
- Recognize that trading is about probabilities, not certainties (the only certainties are death and taxes).
- Don’t open too many orders at once (otherwise, the anxiety will rise).
- Create and stick to a trading strategy. Train yourself to trade in one of the traditional Forex indicators (clear idea, clear fear exit).
- Get yourself a trading journal and analyze it (trading with confidence enables you to trade objectively).
The Fear of a Live Account
This is the most significant psychological hurdle a trader faces. But how does it come about?
To be honest, once you start trading, you will be trading with real money, raising your fear of “what if I fail?”
A demo account is an effective way to get acquainted with the market and the system, but it differs from trading with real money.
Because the prospect of losing money is stressful, you should learn how to manage your emotions and overcome your fears to maintain control over your trading decisions.
Don’t think trading is an accessible business. Thus, it is normal for you to lose money during the initial stages of your trading.
Now how do you overcome this?
Open a cent account: Yes, a cent account will not make you rich overnight, but it will help you feel responsible for your money and put your skills to the test. Lowering your risks will help you clarify your strategy, and taking a small profit will lift your spirits.
Simply put, DO IT: Trading forex is about overcoming your fears; sometimes, that means making courageous choices. Give yourself some credit; the person who never makes a mistake is the person who has never done anything.
Fears Are Stories
A trader’s paralyzing dread of losing money or a transaction might prevent them from taking advantage of high-probability trade setups, force them to continually second-guess their decisions, and even keep them from getting any rest.
It is common for humans to fear when trading. But it is totally up to you whether it leaves you paralyzed or propels you to new heights.
With the help of these solutions, we hope to be able to help you conquer your trading phobia and take your trading to new heights.