It’s easier to deal with fear when you realize that the emotion of fear cannot exist if it is not preceded by worry which is preceded by doubt. In fact, it all usually starts with a tiny bit of doubt about a small aspect of a perfectly fine trade. The doubt soon turns into worry which soon turns into fear and that soon causes the trader to emotionally act on his/her positions.
This is not how you want to trade the market.
“What’s the solution then?” you may ask.
It’s quite simple, as is always the case for almost any “trading psychology” problem.
And that is "Do a sound and solid analysis and then stand by it!” - Only act in accordance with what the analysis suggests should be done.
No one is 100% immune to their emotions, but if you can keep them to an absolute minimum when making trading decisions that will be a huge step forward.
Here are some tips to help you stand by your analysis.
To conclude, the point of eliminating worry is far from suggesting to be complacent or careless. In, fact nothing could be further from the truth. Disregarding the risks will definitely lead you in the wrong direction in trading.
However, the point is that the emotion of worry or fear doesn’t do any good for a trader, and, as a matter of fact, it can only negatively affect their decisions and results. So, the best way to go about it is to be absolutely aware of the risks and what could go wrong with a trade but to not engage emotionally with these thoughts at all.
And, actually, this is true for every area of our lives. We should absolutely be aware of the risks that could cause something to go wrong, but fueling those thoughts with emotions doesn’t do anything to help the situation. In reality, we are much better able to make the right choices and take the right actions when we are calm and relaxed.
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