Traders often feel the fear of trading. Generally, the fear comes from trauma, lack of confidence, lack of understanding, and so forth.
All market participants have different types of fears depending on the conditions and instruments they choose.
Moreover, people often think that trading is easy and even considered a short way to get rich. However, when the reality says otherwise, this makes a disappointment since it does not fulfill their expectations. One of the trading success keys is how we prepare ourselves to overcome all possibilities that can happen.
Here are 5 types of fears that can arise in trading:
Fear of Not Understanding
For novice traders, challenges in trading arise from choosing what candidates or instruments to trade. Even after choosing, they are still confused about what price they want to buy, the target price, and often don’t even think about the cut loss limit.
Fear immediately arises after the novice trader opens a position because the numbers start to change. Especially, when prices are in the opposite direction to buy positions, novice traders can be confused about where the maximum limit of losses that can occur.
Fear of False
As humans in general, we feel satisfied and confident if right and feel disappointed and even punished if wrong.
In various ways, we want to be right and avoid mistakes. In trading, there are always conditions when our analysis is right and the market goes according to expectations. On the other hand, there are also conditions when our analysis is right but the market goes against that analysis.
However, no matter how good our strategy, the market is always right and cannot be controlled by our analysis.
Thus, traders don’t focus properly or wrongly on the analysis but focus on the profits and risks experienced. According to Investopedia, ego and perfectionist attitudes make trader performance more difficult. Traders who insist on their analysis and want their analysis to always be right will encourage it to immediately take profits when the market goes according to analysis and fear when prices start to reverse direction temporarily. don’t
Read more: 3 Types of Stop Loss to Minimize Your Trading Risks
