The Only Thing For You To Fear Is Fear Itself
Fear is one of the top two drivers of asset prices within the financial markets. Fear is so pervasive it can cause smart people to sell at the wrong times, and weak ones to buy at the worst times. The trouble with fear is that it comes in so many forms it can creep into your trading without you even knowing it. This is a list of the top five fears that may affect your trading. Learn them, know what they are, and gain an edge in your trading that will lead to better results.
The Fear of Change – Change is hard. It is easy to do things the same old way you’ve always done them and that is a good thing when it comes to trading. You want to do the same things over and over again, mechanically taking money out of the market, but when things start to not-work you need to be ready to adjust. The market is a fickle beast whose mood can change at the drop of a hat. If you aren’t prepared to adjust your strategy, or choose a different asset, or alter your stance on the market when the time is right you are going to get wiped out.
The Fear of Waiting – Waiting is hard to do, sitting around watching the charts waiting for just the right signal is nerve wracking. If you aren’t prepared to do it. Fear of waiting can also be called fear of missing out, you see a signal develop and you want to get in as early as you can. The problem is that if you get in too early the signal you are watching could evaporate and leave you out in the cold. If you can’t for proper signals you are going to waste your time and money, and drive yourself mad while doing it.
The Fear of Losing – Losing is something else that is not easy to do. No one wants to lose a trade, to lose money, to be a loser. We want to be winners and for some that may mean not taking risks. The problem with that is, if you are a trader, you have to take risks to win. If you aren’t in it you can’t win it, so to speak. The fear of losing may keep you out of trades, or it may cause you to trade too conservatively, or to take profits too soon in an effort “not to lose”. If you play not to lose you will be able to keep your capital but you won’t make big money, not like you will if you play to win.
Fear of Decisions – The fear of decisions plagues many people. They just can’t decide on what to do, even if it doesn’t matter, because they may miss out on something else. This isn’t so much the fear of losing but a neurotic fear born of insecurity. To be a trader you have to be decisive, you have to make some decisions with quickness, and hesitations will cost you money.
The Fear of Learning – This may sound like a weird fear and it is, the fear of learning, but it exists and it may impact your trading. You need to spend time learning to trade, and then spend more time learning from your mistakes and honing your skills. If you can’t approach the market as a student then you’re going to get schooled by just about every other trader there is.