Nothing To Fear But Fear Itself
"But there is no reason to live and no limit to our miseries if we let our fears predominate."
— Seneca, Moral Letters
An interesting meditation today and something that we can compare to trading too of course.
Fear is one of the biggest stumbling blocks for us as traders! It can make us hesitate over a trade, even though that potential trade fully meets the rules/criteria for our strategy. It can make us cut a trade short, because we become fearful that a trade could go against us.
We have to trust in the rules/criteria that we have put in place for our strategies and take advantage of the edge we are giving ourselves.
If you are fearful of placing a trade, even though you have an pre-agreed exit point, ready to be applied, should the trade go against you, then maybe you need to lower your stakes until you have built up your confidence in trading your strategy.
Every time that you execute your trades and you make the right choices by managing those trades to take your pre-set targeted profit, or your pre-agreed controlled loss, you are becoming more consistent. This in turn breeds a confidence in your ability to make the right decisions, without hesitation, when you need to.
So don't be fearful about your next trade, ask yourself this;
1). Does it fully meet the rules/criteria for my strategy?
2). Do I know where my exit point will be, if the trade is going against me?
If the answers is yes, then nothing should make you fearful or hold you back. If you stick to your plan, the worst case scenario is that your trade goes against you and you cut it short, taking a controlled loss at your pre-agreed exit point with your trading bank protected.
Because of the historical stats/data that we have available to us, we know that our trades will be profitable many more times than when they will go against us. This means that our trading bank is protected and we will be profitable long term, because the regular profits will far outweigh the occasional controlled losses.Obviously the more you practice, the more you will get to know your strategies inside out and back to front.
The more you trade and stick to your rules, the more you will eliminate the fear to trade; I promise you!
Stick with it, staying focused and "in the zone" and you've got this!