Do you afraid to take a trade that your stop loss will get hit?
Do you afraid to place a trade after losing money?
Most people think that trading is easy. You need to just buy or sell based on the technical setup. But the reality is far from the buying or selling a stock/Index.
In my today blog, I have described the three biggest fears that destroy most traders, and how to overcome these fears in your trading.
- Fear of the unknown: When you trade without stop loss, you actually don’t know how much you can lose. Sometimes, you can even lose entire capital in one trade itself. You are subjected to unknown forces of the market that work against your trade and make you helpless. The only favor in this type of trading is hope. This fear is known as the fear of the unknown.
To overcome this kind of fear, you need to decide a trade based on technical and before entering a trade, decide your stop loss if the trade went against you and target if worked in your favor.
- Fear of being wrong: We want to be right all the time, and hate to be wrong some times. Even though you are very good at analyzing stocks based on technical and fundamentals, you still find difficulties to execute a trade. The reason is, you think what if I lose the trade or the trade went against my technical analysis.
You need to understand, there is no one who is right all the time in the stock market. Even if you are right 60% of the time, then also, you can be a profitable trader. You need to work on your RR ratio and try to achieve a 60 percent winning rate.
- Fear of missing out: There are times when you do technical analysis and think the stock will move up. After some time, you see that stock is moving up and reached near the target level. You will be in a fear that it will hit the target and you will miss this awesome opportunity to trade. Because of the fear that triggers inside you, will make your mind to buy this stock at a higher price than the decided one. At this point in time, you forget after any movement, there is a retracement period and take a wrong entry. When you buy this stock, this starts falling down and your fear of losing money will be high and you end up your wining trade in loss.
To overcome this kind of fear, try to have your loss calculations in advance and if the entry is missed, let it go. Don’t look at that stock again and again and try to look for new opportunities.
As a human being, it is normal to have fear in trading. But this fear that destroys you or takes you to a new high is completely dependent on you.
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