Trading makes us feel a lot of emotions. They occur at any time based on where we stand in our strategy and how the market is responding. Managing emotions in trading is undoubtedly essential to become and remain profitable in the long time.
The emotions a trader can try are manifold: avidity, despair, uncertainty, happiness, fear, hope etc … Greed is definitely the main emotion. Avidity has led us to trade from the beginning, but in this article we will examine the emotion that stops us and not allow us to go on even when success is one step away: fear. Fear of money-loss.
Fear is one of the most common emotions; it manifests itself in various ways and can be the cause of many errors in trading. Fear of money-loss delays the time to cash in a loss, which then becomes much greater losses and causes traders bind the winning trades too early.
Despair and fear are two sides of the same coin, and both prevent us to remain be calm, patient and cautious.
Other times, however, hope and fear go hand in hand. Traders, who have a losing position, often show signs of hope, when put back the realization of loss and give to a trade more room than they had planned.
Another example of hope is when traders try to recover the losses of the past and then entering the market with an oversized position without following their rules.
Similarly the fear of losing their money can play tricks, such as the fear to enter a trade. Many potential traders keep away from binary options trading because they are afraid of losing their money. Similarly, however, the fear can help you stay away from high-risk operations.
There are cases where fear overcomes avidity. All are designed to achieve maximum results, but only few succeed. The safety of their capital is more important than profit, which is designed to achieve.
The biggest obstacle to the success of a trader is fear. It’s like running a marathon and meets a large dog that barks at you just before the finish line.
Here some limitations or self-limitations often caused by fear of money-loss:
- it continues to block you and if not remedied, your strategies will become obsolete and useless;
- it will prevent you from seeing the possibilities of excellent earnings.
If the fear of failure is what prevents you from investing you have to get around it and move on. To manage risk and emotions, you must accept the negative feelings instead of ignoring them or suppress them. Only in this way you will be able to focus on your positive goals.
The fact of having lost money does not make you a failure.
Whenever happens money-loss or the market is not favorable, as it can definitely happen, rather than stop, analyze what is happening around you. Examine your trading actions and try to identify their weaknesses. Learn from your mistakes and make it treasures for the next trade.
In conclusion, better you accept your fear of money-loss and not feel frustrated and angry when your expectations are not realized. Take what the market gives you, without forcing it, your trading will be stress-free and full of positive emotions.