Getting Over Your Fear of Trading
If you have a fear of trading, it’s perfectly understandable. You can’t just wake up one day and start making tons of cash through day trading. It’s unfortunate, but it’s the reality of it. However, that said, today we want to talk about the five best ways to get over your fear of trading. Let’s get right to it.
Fear of Trading Tip #1 – Engage in Proper Risk Management
One of the ways for you to get over your fear of trading, and of course the fear of losing money, is to engage in proper risk management. Now, there are many different ways to engage in risk management for trading, and they all work wonders. The point here is that you need to know what risk is, you need to realize that risk is inherent in the market, and you need to be comfortable with it.
This is just a fact when it comes to trading, whether Forex or otherwise. Risk is inherent in the market and there’s always a chance of losing trades. Now, the point here is that you just have to accept this, but it doesn’t mean that you can’t minimize risk. There are many different risk management strategies out there to help you minimize the risk of losing trades. Being comfortable with risk, and being able to minimize it is one of the best ways of getting over your fear of trading.
Tip #2 – Learn from the Best – Educate Yourself
Rome wasn’t built or sacked in a single night, and yes, this analogy works for Forex trading and other types of trading too. Folks, there has not been a single person in the history of trading that simply woke up one day as profitable expert. This is just not the way it works, because day trading is not easy, not in the least. Yes, a lot of this fear of trading comes from a lack of knowledge and skill.
Therefore, don’t just wake up one day and decide to start trading. This is not the kind of thing you run into head first. You can’t just hit the ground running full speed, because you will wipe out hard. Pro Forex and day traders most often start with some kind of education. Sure, there are lots of Youtube videos out there which can provide you with trading tips and strategies. However, more often than not, they just are not very comprehensive.
The best way to get over your fear of trading is by taking a full fledged trading course, something like the Income Mentor Box Day Trading Academy. You’ll start out by learning the basics of trading, then quickly move on to the more advanced aspects. Fear often comes out of the unknown, but if you feel confident in your knowledge and trading skills, then a lot of this fear can be averted.
Fear of Trading Tip #3 – Create A Solid Trading Plan
Yes, this is partially related to the above point, as the fear of the unknown is what causes a fear of trading for many people. Therefore, a great way to get over your fear of trading is to make a solid trading plan. You need to figure out what kind of charting solutions to use, what indicators you are most comfortable with, what kind of analysis you want to perform, and what type of trading you want to engage in.
You then need to set yourself some realistic trading goals too. The best way to trade is with a plan. People who trade without a solid and well thought out plan usually don’t last very long at all.
This is especially true if you start trading without a plan, only to lose a ton of cash, which will then only make your fear of trading that much worse. Folks, don’t start trading without the proper knowledge and a solid plan. Attacking Forex trading, and day trading in general, in a calm, reasonable, and thought out manner is the way to go.
Tip #4 – Only Trade with Money You Can Afford To Lose
What definitely instills a fear of trading in many people is the underlying fear of losing too much money, and then not being able to afford food, shelter, and other essentials. Way too many beginners make the mistake of trading with too much cash, cash that they can simply not afford to lose. Many people will jump head first into trading and risk more money than they can afford to lose.
Of course, once you do this, you may be in debt, and worse, your fear of trading just increased exponentially. A great way of getting over this fear of trading is not risk more money than you can comfortably afford to lose. Say you make $5,000 per month, and you need $3,500 to live. Let’s give you a safety net of $750, which you put into your savings account.
This means that you are left with $750 of disposable income. Disposable income is the only money you should be trading with, not your money you need to feed your family. Therefore, if you know that you have all the bases covered, and you can afford to survive even if you lose that extra $750, at least you know you won’t be going hungry or living in the street.
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Fear of Trading Tip #5 – Practice Makes Perfect
Ok, so a fear of trading is totally natural, especially if you have never done it before. Now, all of the training, YouTube videos, trading courses, advice, and risk management won’t totally get over your fear of trading. You actually need to trade, because as the saying goes, practice makes perfect.
It’s much easier to get over a fear of trading, or any fear for that matter, if you confront it head on. Yeah, you will lose trades. This much is a given. However, over time, with the right training and lots of practice, you will get better at it, and this fear of trading will subside as your confidence grows.
The Fear of Trading – Final Thoughts
To get over your fear of trading, you need to do the research, get educated, engage in risk management, not trade with more cash than you can afford to lose, and finally, get over the hump and practice. These are by far the five best ways to get over a fear of trading.