You can find the proper remedy only if you know the problem accurately. In forex trading, fear is a strong emotion that can badly impact your trading. Here are five tips to overcome your fear in trading.
1. Trading goals
Develop clear trading goals and plans. Strict adherence to planning and discipline enables traders to trade faster and shorter critical moments while building traders’ trust.
2. Funds management
Since the fear is more due to the continuous withdrawal of account funds to reduce the adverse effects of this psychology, traders should adopt a fund management plan following their actual situation, such as dividing the funds into ten equal parts, gradually increasing the number of resources and the limitation on losses incurred by each fund. Determine the maximum loss range of daily, weekly or monthly. Limit each trading instrument according to the trend, stops-loss and predefined percentage of risk.
Stick to the simulation and daily review. Simulation is crucial for novice traders. In this process, you should be familiar with different markets and trading modes, understand some basic concepts about trading, and be mindful of your psychological state. Whether in simulation or actual trading, you should insist on responding daily, properly admit and understand the reasons for each loss and capital curve retraction.The more experience you have, the less fearful you will be in the transaction to encounter.
4. Recognize mistakes
Learn to be calm about wins and losses and bravely admit mistakes. Many traders are too complacent. They are unwilling to admit their mistakes every time they read the wrong market or even suffer losses. Instead, they continue to conduct aggressive trading operations to prove themselves. As a result, they often make mistakes and can also lead to fears.
5. Recognize emotions
Recognize the existence of negative emotions and try to find the information behind them. In trading psychological training, we should not try to contain or deny fear, anxiety and discomfort, but learn to reflect on the reasons and why to find countermeasures. If you fear, you have to admit that having this type of emotion is expected and then keep asking yourself, why am I afraid? is there a new emergency in the transaction or other reasons? How severe is this fear? Is it in the normal range? How can it be resolved? Human psychology will have a tolerance period. Conscious training and tempering can weaken the negative psychological effects on the transaction.
If you want to overcome your fear of trading, you must first realize and admit your emotional follies. Once you know your weaknesses, you can then design a solution to address them. You can cope up with your fear if you have a clear trade plan and defined objectives. You can remove your fear if you stay disciplined and manage your funds smartly.