How to overcome fear in trading

Being a trader can add a whole carload of extra emotions and worries to your life. Fear, along with other important emotions, hope and greed, drives the forex market. Because of the fear of losing money, which affects everyone involved in forex trading, fear can be called the number one emotion in trading.

In general, the emotion of fear arose as a result of a perceived threat and developed into a natural defense mechanism in most animals. In our heads, fear is handled by the limbic system, which is one of the most primitive parts of the brain. Fear is one of the components of the self-preservation instinct in developed animals and manifests itself in the form of "fight or flight." The same is true for Man.

Several types of emotional responses associated with fear arise during trading:

The above-mentioned emotions associated with fear are reflected in the daily movement of the markets and often lead to trading losses if they are not properly controlled.
Nevertheless, fear can be extremely useful in the event of unforeseen situations in the market. As W.D. Gann, one of the famous traders of the past, noted: "Fear will save you if you act quickly when you realize that you are wrong."

Many professional traders admit that they use fear as a kind of sixth sense that allows them to exit a position in time. This applies to situations when neither take-profit nor stop-loss has triggered yet, but the trader feels that "Something is wrong." Another Gann quote reflects the above well: "Fear of the market is the beginning of the road to wisdom."

In principle, when it comes to fear, keep in mind that fear relates almost exclusively to future events. It can take the form of prolonging an unacceptable situation, such as holding losing orders, which can make the current situation even worse.

A good way to work constructively with fear is to replace hope with it, since hope can be extremely harmful for a trader. For example, instead of thinking, "I hope the market comes back," you can replace that thought with the much more useful, "I am afraid I will lose more money." Caution in trading does no harm. This thought-replacement technique can help well if it is morally difficult for you to accept and close losing trades.

In general, if you can be disciplined and trade using a good strategy, with the application of and unquestioning adherence to a capital management system, fear and other emotions can be easily curbed. As long as you "plan your trading and trade according to the plan," fear can usually be minimized in your forex trading.

P.S. And to dispel the seriousness of the text above, I suggest watching a scene from some obscure western. :)

Drugaya emotsionalnaya reaktsiya, kotoraya mozhet otritsatelno povliyat na foreks treydera, vklyuchaet v sebya strakh, prepyatstvuyushchiy soversheniyu kakikh-libo deystviy, a imenno otkrytiyu/zakrytiyu pozitsiy. Eto mozhet osobenno nanesti vred, esli treyder, derzha proigryshnuyu pozitsiyu, nakhodit sebya paralizovannym, ne sposobnym zakryt ubytochnyy order, v to vremya kak rynok prodolzhaet dvigatsya protiv nego.

Etot tip reaktsii mozhet takzhe pomeshat treyderu otkryt pozitsiyu, kogda on ne reshaetsya "spustit kurok", i tem samym idet protiv svoego zhe torgovogo plana i pravil sistemy.

Drugaya raznovidnost strakha, kotoraya voznikaet v protsesse foreks treydinga,  kak pravilo, proiskhodit posle togo, kak treyder zakryl proigryshnuyu sdelku. Iz-za utraty uverennosti v svoey sisteme, vyzvannoy predydushchey proigryshnoy pozitsiey, foreks treyder mozhet byt slishkom napugan, chtoby vnov voyti v rynok, dazhe polnostyu osoznavaya vozmozhnost vernut dengi, poteryannye na predydushchey sdelke.

V printsipe, kogda rech idet o strakhe, imeyte v vidu, chto strakh otnositsya pochti isklyuchitelno k budushchim sobytiyam. Eto mozhet prinimat formu prodleniya nepriemlemoy situatsii (uderzhaniya ubytochnykh orderov) , chto mozhet sdelat tekushchee polozhenie eshche khuzhe.

Khoroshiy sposob konstruktivnoy raboty so strakhom zaklyuchaetsya v tom, chtoby zamenit im nadezhdu, kotoraya mozhet byt krayne pagubnoy dlya treydera. Naprimer, vmesto togo chtoby dumat: «Nadeyus, rynok vernetsya", vy mozhete zamenit etu mysl gorazdo bolee poleznym "Ya boyus, ya poteryayu bolshe deneg». Ostorozhnost v torgovle ne pomeshaet. Eta tekhnika zameny mysli mozhet khorosho pomoch, esli vam moralno tyazhelo prinimat (i zakryvat) ubytochnye sdelki.

V obshchem, esli vy mozhete byt distsiplinirovannym i torguete, ispolzuya khoroshuyu strategiyu, s primeneniem i besprekoslovnym sledovaniem sisteme upravleniya kapitalom, strakh i drugie emotsii mozhno legko obuzdat. Do tekh por poka vy "planiruete vashu torgovlyu i torguete po planu", strakh obychno mozhet byt sveden k minimumu v vashey torgovle na rynke foreks.

P.S. I daby razveyat sereznost teksta vyshe, predlagayu posmotret stsenu iz odnogo neizvestnogo vesterna :)