Handling Fear

[Joe Ross]

A reader asks: How do you handle fear? I seem to have plenty of it.

Let's get one thing straight. Fear, for the majority of traders, is a very real thing. You have it, I have it. Others have it as well. What is it that traders fear? The top three, in order, are:

1. Fear of missing a trade.
2. Fear of losing money.
3. Fear of being wrong and losing face.

In order to become a professional trader, you must learn to deal with fear. The first step is to acknowledge that you have it, which is what you have done. Once you admit to fear, you can begin to deal with it.

When you notice the impulse to trade based on strong fear, it is usually best to literally step out of the trap by stepping out of the situation.

You need to get up, walk away from the computer. Turn off the television if it's tuned to a financial station, take a walk, get something to eat, go outside and cut the grass, water the lawn, or do anything that will move you out of the fear/panic mode.

Don't return to your trading desk until you have managed to achieve some emotional control over your fear/panic reaction. If you can't get a grip on your fear, then don't come back that day.

Most likely you will find that even if you keep thinking about the miserable market conditions while you water the lawn, simply getting away from the keyboard and monitor is enough to make a difference. It removes the demand to take action, and gives you the mental space to gain perspective and let go of your impulsive, fear-based reaction.

 

[Mr. Charts]

What worked for me long ago when I started trading was not to walk away from fear and go and mow the lawns, but to face that fear full on and deal with it.
If you're trading your own money and relying on it for your family's living you will feel the fears and emotions of trading. Concentrate on ignoring them and NOT allowing them to control your actions.
Are you a (wo)man in CONTROL of yourself or an emotional lump of jelly?
Which option are YOU going to choose?
Concentrate on trading on your plan/evidence of price action and ignore the emotions.
Face up to the problems, don't walk away.
Others obviously think otherwise and that's fine. There is no right or wrong in this subject. What works for you as an individual is what matters. I could never walk away.
Richard

 

[Windowsill]

A reader asks: How do you handle fear? I seem to have plenty of it.

Let's get one thing straight. Fear, for the majority of traders, is a very real thing. You have it, I have it. Others have it as well. What is it that traders fear? The top three, in order, are:

1. Fear of missing a trade.
2. Fear of losing money.
3. Fear of being wrong and losing face.

In order to become a professional trader, you must learn to deal with fear. The first step is to acknowledge that you have it, which is what you have done. Once you admit to fear, you can begin to deal with it.

When you notice the impulse to trade based on strong fear, it is usually best to literally step out of the trap by stepping out of the situation.

You need to get up, walk away from the computer. Turn off the television if it's tuned to a financial station, take a walk, get something to eat, go outside and cut the grass, water the lawn, or do anything that will move you out of the fear/panic mode.

Don't return to your trading desk until you have managed to achieve some emotional control over your fear/panic reaction. If you can't get a grip on your fear, then don't come back that day.

Most likely you will find that even if you keep thinking about the miserable market conditions while you water the lawn, simply getting away from the keyboard and monitor is enough to make a difference. It removes the demand to take action, and gives you the mental space to gain perspective and let go of your impulsive, fear-based reaction.

Trade at sensible non life threatening amounts until some skill base is established.

 

[Black Swan]

What worked for me long ago when I started trading was not to walk away from fear and go and mow the lawns, but to face that fear full on and deal with it.
If you're trading your own money and relying on it for your family's living you will feel the fears and emotions of trading. Concentrate on ignoring them and NOT allowing them to control your actions.
Are you a (wo)man in CONTROL of yourself or an emotional lump of jelly?
Which option are YOU going to choose?
Concentrate on trading on your plan/evidence of price action and ignore the emotions.
Face up to the problems, don't walk away.
Others obviously think otherwise and that's fine. There is no right or wrong in this subject. What works for you as an individual is what matters. I could never walk away.
Richard

Bang on there Richard you have to break through, embrace the fear. Conversely fear and greed are excellent emotions IF used in your favour...

Am I greedy? You bet, otherwise why the fook would I be doing this? I want more for me and mine...this isn't a hobby it's my career choice...

Am I fearful? You bet, of what I might I miss out of (for me and mine) if I don't stick to the plan, make it work and keep the money rolling in...

F.E.A.R.

Focus, engage, adapt, react...something I made up and is stuck to the side of each pc I use to trade...

 

[barryb]

A reader asks: How do you handle fear? I seem to have plenty of it.

Let's get one thing straight. Fear, for the majority of traders, is a very real thing. You have it, I have it. Others have it as well. What is it that traders fear? The top three, in order, are:

1. Fear of missing a trade.
2. Fear of losing money.
3. Fear of being wrong and losing face.

In order to become a professional trader, you must learn to deal with fear. The first step is to acknowledge that you have it, which is what you have done. Once you admit to fear, you can begin to deal with it.

When you notice the impulse to trade based on strong fear, it is usually best to literally step out of the trap by stepping out of the situation.

You need to get up, walk away from the computer. Turn off the television if it's tuned to a financial station, take a walk, get something to eat, go outside and cut the grass, water the lawn, or do anything that will move you out of the fear/panic mode.

Don't return to your trading desk until you have managed to achieve some emotional control over your fear/panic reaction. If you can't get a grip on your fear, then don't come back that day.

Most likely you will find that even if you keep thinking about the miserable market conditions while you water the lawn, simply getting away from the keyboard and monitor is enough to make a difference. It removes the demand to take action, and gives you the mental space to gain perspective and let go of your impulsive, fear-based reaction.

Your posts prey on the weak, vulnerable, easily influenced and naturally indisciplined. These are the exact same people who will in turn by your books as a result of your 1 post contributions to your own threads, which has probably been cut and pasted from your hard-drive anyway. As a natural cynic, i can only conclude that you are using t2w as a form of free advertising.

Running away from your positions is what people do who shouldn't even be trading in the first place. You need to be able to see the pain and be emotionally detached from it. The sooner you get to that stage, the sooner you'll start to make money. Mr Charts said it right.

One more thing, joe, other than to sell more books, why the hell did you feel the need to patent/copyright/trademark the 1,2,3 set-up which has been around decades before you were even in nappies?

 

[Black Swan]

Running away from your positions is what people do who shouldn't even be trading in the first place. You need to be able to see the pain and be emotionally detached from it. The sooner you get to that stage, the sooner you'll start to make money. Mr Charts said it right.

:smart:

 

[Sunshine On Leith]

The top three, in order, are:

1. Fear of missing a trade.
2. Fear of losing money.
3. Fear of being wrong and losing face.


Im surprised at the order yo have these in. I would have thought number 2 was the top fear.

Out of interest is this your theory or based on some sort of research?

Personally, number 2 is my top fear by some distance. I try to take the view that I would rather be out of a trade wishing I was in, than in a trade wishing I was out.