Trading Fears - Losing money, Missing Out, Being Wrong

tradefxlive

Junior member
19 3
In my experience there are 3 fears of trading all traders experience at one point in their careers:
1. Fear of Losing Money
2. Fear of Missing Out
3. Fear of Being Wrong

From my own trading I contend with the 'Missing Out' more than any other fear. Of course I still have fears of 'Losing Money' and 'Being Wrong' but I believe that with experience I will conquer all 3 of the fears and be the trader I want to become.

Mark Douglas has beautifully written in his book 'Trading in the Zone' that there are 5 Fundamental Truths in Trading:
A. Anything can happen.
B. You don’t need to know what is going to happen next in order to make money.
C. There is a random distribution between wins and losses for any given set of variables that define an edge.
D. An edge is nothing more than an indication of a higher probability of one thing happening over another.
E. Every moment in the market is unique.

If you are able to accept these 5 facts then you are on your way to becoming the trader you want to be - FEARLESS.

Now you may be wondering on the steps I have taken to help me achieve my ultimate goal of eliminating the 3 Fears. I have incorporated rules and guidelines in my trading plan which will help me achieve this goal, they are simple steps but you must never under estimate the power of simplicity.

The Fear of Losing Money - I have set aside some capital for my trading. Of this capital I only risk 1% on any one trade and I set myself a loss of 4% per week before I stop for the week. Just by using this simple money management technique I would have to have 6months of consecutive losses to lose the whole sum of my capital. By looking at my capital in this point of view helps me to maintain focus on my trading and not on losing money as I have a trading strategy that give me positive results over the long run. More importantly I beleive in my strategy with lots of backtesting and prevoius results.

The key to conquering this fear is by setting aside some capital that you are honestly able to accept to lose. This is something only you can decide and only you can set.

Fear of Missing Out - You cannot catch every move and you cannot trade every minute of every day. This is a fact! If you can accept this then you have ultimately accepted that you will miss trades. To be successful in trading you must have a strategy. This strategy gives you an edge in your trading, this strategy identifies when you enter trades, manage stops and manage exits.

I have a strategy that I know in the long-run will return me more winners than losers. This strategy is a trend following strategy. So I WILL miss all the counter trend moves, this is something I have to accept. Yet for my trading w/e 8th Jan I traded the USDJPY against the short term trend. Yes I found myself breaking my own rules, which has left me dissapointed. I was scared on missing the move. I have taken this on board and have said to myself that I will not break this rule again. My motivation to help me get on the path to eliminate this fear is by looking at my weekly results; if I had traded my rules I would have been up 3.65% rather than only 2.2% for the week.

Fear of Being Wrong - If you believe that anything can happen in the market then you conquer this fear. Every time you decide to buy or sell you have essentially tossed your coin (which is weighted to a positive expectancy as your strategy gives you an edge) and all you can do now is wait for you targets to be hit or your stop loss to be hit. No-one, yes n0-one, has a 100% win ratio in trading. You have to remember that this is a zero-sum game. If you have a winning trade then someone else has had a losing trade.

I find this the easiest fear to contend with. I actually do not fear being wrong. To really accept this you must embrace the 5 fundamental truths of trading on a deeper level. By just acknowledging one of the above truths you can start eliminating the fear of being wrong.

Happy Trading
 
Last edited:

eminifuturesblog

Junior member
20 3
In my experience there are 3 fears of trading all traders experience at one point in their careers:
1. Fear of Losing Money
2. Fear of Missing Out
3. Fear of Being Wrong

From my own trading I contend with the 'Missing Out' more than any other fear. Of course I still have fears of 'Losing Money' and 'Being Wrong' but I believe that with experience I will conquer all 3 of the fears and be the trader I want to become.

Mark Douglas has beautifully written in his book 'Trading in the Zone' that there are 5 Fundamental Truths in Trading:
A. Anything can happen.
B. You don’t need to know what is going to happen next in order to make money.
C. There is a random distribution between wins and losses for any given set of variables that define an edge.
D. An edge is nothing more than an indication of a higher probability of one thing happening over another.
E. Every moment in the market is unique.

If you are able to accept these 5 facts then you are on your way to becoming the trader you want to be - FEARLESS.

Now you may be wondering on the steps I have taken to help me achieve my ultimate goal of eliminating the 3 Fears. I have incorporated rules and guidelines in my trading plan which will help me achieve this goal, they are simple steps but you must never under estimate the power of simplicity.

The Fear of Losing Money - I have set aside some capital for my trading. Of this capital I only risk 1% on any one trade and I set myself a loss of 4% per week before I stop for the week. Just by using this simple money management technique I would have to have 6months of consecutive losses to lose the whole sum of my capital. By looking at my capital in this point of view helps me to maintain focus on my trading and not on losing money as I have a trading strategy that give me positive results over the long run. More importantly I beleive in my strategy with lots of backtesting and prevoius results.

The key to conquering this fear is by setting aside some capital that you are honestly able to accept to lose. This is something only you can decide and only you can set.

Fear of Missing Out - You cannot catch every move and you cannot trade every minute of every day. This is a fact! If you can accept this then you have ultimately accepted that you will miss trades. To be successful in trading you must have a strategy. This strategy gives you an edge in your trading, this strategy identifies when you enter trades, manage stops and manage exits.

I have a strategy that I know in the long-run will return me more winners than losers. This strategy is a trend following strategy. So I WILL miss all the counter trend moves, this is something I have to accept. Yet for my trading w/e 8th Jan I traded the USDJPY against the short term trend. Yes I found myself breaking my own rules, which has left me dissapointed. I was scared on missing the move. I have taken this on board and have said to myself that I will not break this rule again. My motivation to help me get on the path to eliminate this fear is by looking at my weekly results; if I had traded my rules I would have been up 3.65% rather than only 2.2% for the week.

Fear of Being Wrong - If you believe that anything can happen in the market then you conquer this fear. Every time you decide to buy or sell you have essentially tossed your coin (which is weighted to a positive expectancy as your strategy gives you an edge) and all you can do now is wait for you targets to be hit or your stop loss to be hit. No-one, yes n0-one, has a 100% win ratio in trading. You have to remember that this is a zero-sum game. If you have a winning trade then someone else has had a losing trade.

I find this the easiest fear to contend with. I actually do not fear being wrong. To really accept this you must embrace the 5 fundamental truths of trading on a deeper level. By just acknowledging one of the above truths you can start eliminating the fear of being wrong.

Happy Trading
Good article, a lot of that I can relate to. Good luck with your trading.
 
Last edited by a moderator:

£10kLoser

Established member
648 64
There is also the fear of failing in your quest to become a successful trader - the fear that you will not realise your dream of becoming financially independent. The anticipation of this is very pleasant and people often prefer to delay finding out the reality by playing at trading, reading about trading, trying new systems, trading very small, etc., etc. and never take the plunge for fear of dashing this dream.
 

shadowninja

Legendary member
5,524 643
Fear of success, too!

"If I'm successful, people will think I'm an evil short seller."
"If I'm successful, I'll have to buy my own place."
"If I'm successful, girls will only want me for my money."
"If I'm successful, friends will only want me for my money."
 
  • Like
Reactions: Paul71

tradefxlive

Junior member
19 3
There is also the fear of failing in your quest to become a successful trader - the fear that you will not realise your dream of becoming financially independent. The anticipation of this is very pleasant and people often prefer to delay finding out the reality by playing at trading, reading about trading, trying new systems, trading very small, etc., etc. and never take the plunge for fear of dashing this dream.

I totally forgot about this. Yes you are right. A lot of people rationalise why they should delay their trading career. In actual fact all the are doing is running away from the fact they might actually fail.

I say, nothing ventured nothing gained. In fact I will add this quote to my motivational quote blog section right now. You can visit my blog at www.tradefxlive.co.uk/blog
 
Last edited:

Paul71

Senior member
2,056 412
Fear of success, too!

"If I'm successful, people will think I'm an evil short seller."
"If I'm successful, I'll have to buy my own place."
"If I'm successful, girls will only want me for my money."
"If I'm successful, friends will only want me for my money."


Nice public profile! I see you only trade part-time,...it's always handy being able to just pull up a chair and trade away,...when you're not sat at the security desk that is:LOL:
 

tradefxlive

Junior member
19 3
Nice public profile! I see you only trade part-time,...it's always handy being able to just pull up a chair and trade away,...when you're not sat at the security desk that is:LOL:
Is that what it says on my profile. Well actually I am fulltime.

I trade FX from 6am - 9/10am and I trade S&P emini Futures between 2:30pm - 4pm (All UK times)
 
Last edited by a moderator:
  • Like
Reactions: Paul71

shadowninja

Legendary member
5,524 643
Nice public profile! I see you only trade part-time,...it's always handy being able to just pull up a chair and trade away,...when you're not sat at the security desk that is:LOL:
Um... what?

I wouldn't trade full time. I'm not the market's bitch. I trade between rock climbing, martial arts training, fitness training, playing Battlefield 2, messing about on too many forums, eating and sleeping. Throw a few hours of voluntary work into the mix. And you see, I only trade part-time. Have fun.
 
  • Like
Reactions: Paul71

Paul71

Senior member
2,056 412
Um... what?

I wouldn't trade full time. I'm not the market's bitch. I trade between rock climbing, martial arts training, fitness training, playing Battlefield 2, messing about on too many forums, eating and sleeping. Throw a few hours of voluntary work into the mix. And you see, I only trade part-time. Have fun.

Sure you don't want to mention any other activities...? Come on, it'll make you look better...:LOL: You're a loner, admit it.
 

HawkTrader

Established member
620 130
Um... what?

I wouldn't trade full time. I'm not the market's bitch. I trade between rock climbing, martial arts training, fitness training, playing Battlefield 2, messing about on too many forums, eating and sleeping. Throw a few hours of voluntary work into the mix. And you see, I only trade part-time. Have fun.
Wow, I'm very similair. Just take out the cool stuff and leave it with "playing Battlfield 2, eating and sleeping". :p

Do you have steam, xfire, anything like that?
 

shadowninja

Legendary member
5,524 643
Wow, I'm very similair. Just take out the cool stuff and leave it with "playing Battlfield 2, eating and sleeping". :p

Do you have steam, xfire, anything like that?
Er. Do I have what? I barely play. Punkbuster problems so 50/50 chance I can actually get in a game!
 

HawkTrader

Established member
620 130
Er. Do I have what? I barely play. Punkbuster problems so 50/50 chance I can actually get in a game!
Oh, so you lied to us? :p Nah, punkbuster is a pain in the backside actually, I've had trouble with it before.

Do you play on the same PC that you trade with?

(Sorry for all this off topic talk!)
 

Similar threads


AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock