I was recently asked..
"How do I overcome the fear of losses and trade confidently?"
This is an important question because with anything in life you can't make you decisions based on fear. Especially as a professional trader. You can not trade out of fear. Period. It will control you and you will cut your wins early and let your looser grow larger and larger. Simply because you fear giving back profits or realizing a loss. You overcome the fear of losses and trade confidently by:
1. Having a trading strategy
- Focusing all your energy on just that one strategy
2. Knowing your trading statistics
- That way you’ll know if you have a winning strategy fear is all in the mind and all you need to do is lean in to your strategy and let the statistics naturally grow your profits.
- If you don’t have a winning strategy just keep your losses small by reducing your position size. You can’t have a a big $ looser if you use small size. Period. But you’ll still be learning valuable lessons.
3. Having a trading support/accountability community
- They will help keep you on track and give you feedback and shared experiences.
4. Ideally having 1–3 traders you follow closely, like a mentor
- This will allow you to know what’s possible
5. Being optimistic and determined
- Trading is definitely not an easy career choice, be prepared to work like crazy and get knocked down often, like almost every day.
This doesn’t mean it doesn’t happen. Today I traded out of fear after having a bigger looser and then lost my confidence not allowing me trade trade a perfect front side move, normally one I could have made several hundred or thousand on.