If you want to be a trader, stress is one of the first things you will have to learn to cope with. Many completely different events can affect the market, so you constantly have to be on your toes and ready to react to take advantage of an opportunity or to simply save your investment. Trading is, therefore, not for everyone, but if you still want to become a trader, you should know that you will most probably face certain trading fears at some point, fears that can easily cloud your judgment. However, there are ways to overcome these trading fears and this is what we want to address in this post. Read on and learn how to improve your chances to end up in the money.
Trading fears | They are actually quite common
First of all, people who decide to trade online often wonder how to find a reliable broker. Unfortunately, scams are not unheard of in this business, so you want to get as much information about your prospective broker as possible. Forums are probably the best place for that because there you can find some genuine feedback from real traders. Next on our list of trading fears is the fear of losing. You probably faced this fear at least once in your life even if you’re not a trader, so the fact that this fear is here should not be a surprise. What you have to realize as a trader is that you cannot win 100% of the time. Losses WILL come and they have to be managed – the important thing is that you’re profitable at the end of the day, month, year. Do not put all your eggs in the same basket; come up with a system or a strategy for your trades.
Trading fears | Learn your limits
Common trading fears often include the fear of missing out, a feeling of desire to own an asset just because something is going on without you. Keep in mind that you cannot be omnipresent and that, if you spread yourself too thin, you won’t be able to cover the latest market developments concerning all your assets. Focus on what you’re good at and try to become an expert in that field. Also, don’t let the fear of letting a profit turn into a loss paralyze you. These things happen when there is an unexpected big market event and there really isn’t much you can do about it. Set a limit of how much change in your assets’ price you’re willing to accept before you decide to react and stick by it.
Trading fears | How do they affect you?
Negatively, of course, but let’s analyze that a bit deeper. Trading is something that challenges you mentally, above all things. It’s not easy to keep a cool head when there’s money on the line and people often act in two completely opposite ways – they either react too quickly and too much or they don’t react at all. If the trades are not going their way, some traders tend to trade much more than usual to make up for the losses, while others don’t dare to make an investment and miss out on many great opportunities. That’s why you need to have something to grab on to when the going gets tough, a sort of lifeline, if you will, to pull you out of that negative mental state. We’ll recommend some methods in the following paragraph.
Trading fears | How to deal with them?
A very helpful trick to help you maintain control of your trading fears is keeping a record of your investments. However, next to all the data concerning these transactions, you should also write down your mental state at the time you were conducting them, so that you know what emotion helps you or obstructs you most. You’d be surprised how much this helps. Furthermore, it is important to pick a strategy and then stick to it for a while. Determine a time period and once that period passes review your strategy’s results. Investing randomly won’t get you very far. Once you have all the data after a period of time, you will be able to make adjustments to increase your strategy’s efficiency. Sticking with a system does wonders to alleviate any trading fears you might have and helps you keep a clear mind.
Trading fears | Conclusion
And that’s about it for this post. The most important thing you can do is to come to terms with the fact that you cannot be right 100% and that you cannot grab every single opportunity that presents itself on the market. We all have our limitations. Come up with a strategy, a system that works for you and stick with it for some time. After that, conduct an analysis and make necessary adjustments. This way, you will leave very little space for trading fears to appear and they will not cloud your judgment because you will always know what to do next. Planning is everything!
Ben Prescott is a senior analyst at BinaryOptionsTrading-Review.com. With years of experience under his belt, Ben is an expert in both binary options and forex trading. He regularly publishes broker analyses on the aforementioned website and is always happy to give useful tips to people who need them. If you want to some sound investment advice, feel free to contact him there