Trading fears are among the factors traders find it challenging to overcome. The impact is so gigantically influential that many articles disclose the ways to overcome such fears. However, little to none of them mention that these fears, to some extent, can be positively contributory.
It is Rande Howell, a trading psychologist, that explains how trading fears can actually become a personal power. If treated accurately, these fears might turn advantageous for traders.
That being said, it is up to the trader to make it happen. The thing is, it is easier said than done. For that reason, traders gravely need to understand the nature of fear and, subsequently, how to make it your very weapon.
Also Read: 5 Types of Fears in Trading
The Nature of Fears
Prior to understanding how fears can be contributory, it is arguably wise to know the nature of fears. Fears are, although debatable, one of the oldest emotions that affect trading, even daily lives. Also, it is naive for traders to invalidate and separate emotions, specifically fears, from trading.
The fears might emerge from various causes and the case might be dissimilar for one trader to another. For instance, fears can arise following a continuous loss, an uncertainty of trading results, and minuscule self-confidence.
In order to understand the nature, it is of salient importance for every trader to be conscious. To be conscious is, in terms of psychological trading, an attempt to contemplate every single past trading acts, including habits, that resulted in either profit or loss.
Remember, keep your friends close and your enemies closer.
How Trading Fears Can be Contributory
After getting to know the nature of trading fears, the next step, if not the most important, is to shift the mind in perceiving fears. That is notably taxing homework to change how minds work.
A question that traders should inquire themselves is why they see fears this excessively disadvantageous. While this question appears to be ignorant, it poses a huge essence in trading.
Yes, it is a matter of perspective. Traders tend to be pessimistic in perceiving such fears. Trading fears can only be contributory if traders look at it through a different perspective. Rather than being skeptical and pessimistic, the first thing to do is to look at the bright side-the opportunity they hold.
However, simply changing the way traders look at fears is far from enough. Thus, traders require a way to utilize their fears.
Making Fears a Valuable Weapon
Making trading fears, a previously seen psychological calamity, a valuable, supporting weapon is no easy task. In so doing, traders must look beyond the surface.
One of the ways to do so is to use trading fears as an indicator. Depending on their types, fears can indicate how successful and accurate is a strategy. Then, the indication project trading evaluation, in which traders can use to determine their next moves.
Another way is to use fears as a limit. Unconsciously, fears can be a limit, preventing traders to sacrifice all of their wealth in a single trade. Without these fears, there will be no boundary traders set to allocate their wealth in one single trade.
There are still, accordingly, many ways traders can utilize fears for their own good. However, depending on each personal case, it is all back to every trader to be ‘crafty’ in manipulating their fears into their arsenals.
Also Read: 5 Types of Fears in Trading (2)
