I must admit that when I first started trading I had no problem pulling the trigger.
As soon as any technical pattern lined up or a news event came through the squawk box, I was ready to pounce.
In the beginning, I would trade at nearly every opportunity. I think I believed I had some sort of natural gift, that all I had to do was stick to my instincts and I would come out ahead.
Of course, I was completely wrong and I was actually overtrading as well.
Fast forward several months though I actually had the opposite problem. I was too scared to trade. I was confused, filled with negative emotions, and if I did put a trade on, I didn’t have the confidence to keep it on for more than a couple of minutes.
I did manage to break through that cycle but it did take some time. So here’s 4 things that helped me conquer my trading fear.
#1 Realise you are not alone
You will know by now that the majority of traders lose, this is not an easy business to get right. But what you should realise is that nearly every trader faces the same confidence issues at some point in time.
When I was low in confidence and could not pull the trigger on my trades it took me a while but I eventually realised I was not alone. In fact, almost a third of the office were experiencing the same feeling, in varying degrees. A month later it was a completely different third of the office that couldn’t place their trades. Trading swings in roundabouts so don’t think too deeply about all the details or you’ll fall into a negative spiral.
#2 Feel the fear and do it anyway
Fear is a very powerful emotion but remember it has positive intentions too. The positive intention of fear is that it makes you more alert and sensitive to danger. That’s a good thing. But so is risk-taking and so is making money.
The trick is to feel the fear and make the trade regardless.
Think about it for a second. What’s the worst thing that can happen?
You’ll lose some money. You might even lose your job.
But so what?
It’s better to go out and proactively follow your dream than letting your trading account whittle down to nothing from commissions and taking small losses.
Take the risk and you will find out just what you really were born to do. And if it isn’t trading then so be it.
I’d rather go out in a blaze of glory than spend months, even years, trying to do something I’m just not cut out for.
Trust me, I’ve seen people waste years of their lives trying to become traders. In the end, if they’d put that time into something else, they would have made a lot more money. Not everyone can be a trader.
#3 Go back to square one
If fear continues to ruin your trading then you need to take a break and re-assess what’s been going on. Was there a time when you were making good trades and doing well or have you always had this trouble?
If you’ve always had the problem then you need to take stock, come up with a completely different approach, something radical.
If you had some success in the past then you need to do whatever it takes to get back to that point. That might mean going all the way back to square one.
It might mean going back onto the trading simulator and paper trading until you are confident in your ability once again.
#4 Screw fear
I don’t advocate recklessness, overtrading, or taking on too much risk but life is simply too short to let fear take over your trading. Screw fear. Forget it. Find your zone, find your niche.
Take control of your own destiny.
JB Marwood is an independent trader, writer, and stock market enthusiast. For more trading tips and strategies, check out his blog at: http://jbmarwood.com/blog