Fear Of Loss – How To Master

Featured photo credit: fitash

Featured photo credit: fitash

There comes a time when a forex trader suddenly lose the urge to trade. Maybe because of his past experience with losses. Maybe because of an emotional roadblock. Or maybe he / she is just lazy.

I recently chance upon this book, Conversation with Forex Market Masters (not affiliate link) And in this ebook it contains many conversation with forex traders. Many of which were not very successful initially.

And so it seems I’m not alone in my path to make forex trading a full time job.

I’m actually halfway through it. Recommended way to consume it. Get a text to speech app like ezPDF Reader if you are using Android and listen to in it the car.

Resist Fear Through Courage

Mark Twain said this. Courage is a strength you call upon in the face of pain or grief. I have that pain and it is the pain of loss, monetary loss that weakens the heart and stone the fingers.

I guess I just have to take the first step. Start with the highest proability trade setup. And take one small win at a time. With a small position.

Resist Fear Through Mastery

To master fear, you must first be able to spell it out. You must when ask what is this fear, how is it affecting you, and your trading. As for me. It is the fear of losing existing or profited money.

I don’t want to lose them and yet if I don’t trade them how do I get more of it?

Hence this is what I should do.

1. Keep my position small, in this way I don’t lose much of them if I am wrong.

2. Scan and pick only high probability trades. Like patterns, over extension.

3. Do not chase price, do not overextend from the moving average. Price is like a rubber band. It always returns back to the mean. But the market is driven by humans. So sometimes it takes time for it to get back to sanity.

Absence Of Fear – Don’t Ignore It

Fear is good. Fear is the reason why you will cry pain when a boiling water scalded your hand. Fear is good when a knife bleeds your skin. Fear is good as your body reacts to an oncoming vehicle. When sometimes.

I was told that fear will freeze your bodily function and feed your body to the opposing force that gives it. In trading it will do the same. I’ve been there.

My ego was on the line. My position was too huge and I ignore what price did. I ignore and my drawdown was getting larger. I ignore and my account blew up in my face. So you see…

Fear is what makes you human. It also helps define exit strategy when train, your body should react.

Action Plan

Understand that fear is there. Learn to deal with it. Keep your position small until you don’t care. Prepare yourself by knowing where to exit if your bias gone either way.

Understand that trading forex is a business. There will be ups and down during your trial. Get lean when the market oppose you. Get mean when the market is with you.

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