Fear to lose
At any point of your career, at least once, you will be having fear. Fear is one of the worst enemies for a trader. It simply what a trader should be avoiding because all kind of emotions will distract you from your decisions. There are many type of fears that traders have:
-fear of missing a trade
-fear of entering a trade
-fear of entering too late
-fear of losing money
I cannot remember last time I didn’t have fear. Fear is present everyday in my trading and I’m honest saying this. The only way I don’t have fear is when I downsize but then you have to fight with the fear of not meeting your expectations. I see many traders have fear of losing money, fear of burning their capital, fear of failure. Traders, friends, fear is normal. Every trader has fear but we can do something to help us:
- Have your fear under control, learn to manage your fears, do really exercise for them for reducing the amount of fear you may have when trading
- Track more your setups, learn more tape reading and trust more your system. BACKTEST.
If you trust your system, you will have more self confidence in your plan, in your trading and therefore less afraid to lose money
- Have a routine, a plan, a every morning todo list. This will block your emotions, it will give you solid backround
- Avoid confusion, everything that will bring confusion to your mind (twitter, posts, tips, other traders) is a no for your trading
- Avoid stress in your life. Trading is already stressful by itself, you don’t need anything that will create more stress
- Set a plan for at least 1:2 risk/reward ratio
- Trade small till you have consistency for at least 6 months
But at a certain point, when trading bigger size, you will have to assume your risk. No matter what, trading incorporate risk. You want to have a better life or dream for the possibility for a better life, then you are a trader. You want to do shifts and have a normal paycheck, then you won’t need this risk.
Risk is part of the game; I remember what Smashthebid wrote once:
Starting a business can be very expensive. Very risky. Very scary. Maybe I did it wrong, maybe I was just poor, a dreamer, but the first businesses I started, took everything I had to start it. I got $150K in debt and put everything on the line including my house. For the first year it was just straight survival mode. If your fortunate enough to make it past the first year your doing better than 90% of the people that try (sound familiar?). Year 2-5 was still survival mode with transition into growth mode. Plan was to reinvest every dime into growth with the big picture in mind. The homerun coming somewhere after year 5.
I killed it in every way. I survived year 1. I stuck to the plan. I reinvested every dime into growth, and I mean every dime. revenue was doubling every year (so were expenses). 175K yr 1, 350K yr 2, 790K yr 3, 1.8 mil yr 4. I was 30 years old with a thriving business, living the dream.
You want to make money, real money, then assume your risk. Be prepared, this is a war. Have your trading buddies by your side, learn, improve together. Everyday I have guys and together we push to the next level. When we fail, we revisit, learn, see what to adjust and do better next time and this over and over.