Fear is a natural emotion. And when you’re putting your hard-earned money into a tryout, you’re going to experience fear naturally. A trader who embraces fear is bound to find success sooner than a so-called fearless trader. However, if it overcomes your trading plan and forces you to make irrational decisions, it is a matter to worry about. So, here are some ways to address it.
Step#1: Identify the source
‘Why are you fearing?’ — Asking this simple question can either snap you out of it or bring a rational solution. Further, it lets you differentiate between a good fear from a bad, which can help you streamline it.
Step#2: Categorize the fear
There are sources of fear which are under your control and a few that aren’t. For example, if you enter a trade with a high lot size and later fear that a loss could wipe out your capital, it is a source under your control. On the other hand, consider the volatility during a high-impact news release. It is a source that you can’t control.
Step#3: Streamline your fear to become a better trader
There are simple solutions to sources that are under your control. Reducing the lot size or trading with an SL can solve half your problems. And for instances that aren’t under your control, the solution is simple – AVOID. Yes, you got to avoid entering into circumstances that can bring the worst out of you. The lot size is a source of fear for most traders. If you enter with low quantity, you’re going to make less out of your work. On the flip side, you go too big, you’re going to lose too much. And a scalper has to calculate it in a split second, increasing the odds to the wrong side.