Fear has to go.
Some how, some way you have to find a way to get rid of fear. It’s the greatest enemy to your trading. Seriously. Enemy #1
I want to take a few minutes to discuss fear and then give you a couple of tips on how to get rid of it. Lets get going.
FEAR IN TRADING
What is fear in trading? It is only one thing: Losing money. Let’s just be super honest here for a second. We all know it’s true right? When you place a trade, is the fear about what the bar things or candle things are doing on your chart on your computer? I would venture to say no. That would be like getting on the freeway and being really worried about which car is passing you and which one isn’t and which ones are turning off and which ones are merging. Seriously. It doesn’t matter. If you have no money on the line, the GBPUSD can fall 1700 pips in a couple hours and you could care less! But if you even have a micro in that mix you are all of sudden laser focused like someone said if you don’t watch every tick of that chart will make or break your retirement, marriage, and career.
Now, if you went all in on that tick, then well, it might actually mess with all that stuff. If you’re a sane person though, you only will have a little bit of capital at risk at any given time. And even with that little bit of money “on the table”, we get scared.
FEAR IN THE ENEMY
Fear is the enemy of all good trading. Trading scared or trading because you need something and the fear that you will not get what you need will ruin accounts. It causes mass stupidity and emotional chaos that never ends well. To be great at this game, this process, this profession, you have to learn to hold that fear in check. Some just conquer the fear cold turkey right. They can just wake up one day and be like, you know, I’m not afraid. Some though have to trick themselves first and then learn the slow way how to get over it.
Here are some tricks I have learned.
TRADE WITH SMALL SIZE
We hear about this all the time but I’m telling you it’s the honest truth. 4 years ago when my trading turned the corner, it was because I went small. Smaller than I ever even considered as worth it. When I was an amateur I was jumping in with full standards, now that I am a pro, I trade with mini’s, half mini’s, up to about .25 contracts and you know what, I don’t give a hot damn what anyone thinks because I like it and I make a ton of pips and I am super comfortable there. It’s a hack on how to fight fear. If I go in heavy right away, I suck as a trader. I will lose all the time. But if I pace myself and give the market room to breath, I stay in control and fear has no place to latch on to me.
Trade small! You will make the money, just let the process come to you.
Once you get comfortable doing this, you can move up if you like or just do one of my other hacks…
COPY YOUR OWN ACCOUNT
If the sight of big money in and out every day and big swings in cash are uncomfortable for you, only trade your small account for small contract sizes and equity swings that you can mentally and emotionally stomach and then ghost most of your money to that account. That way, you get the benefit of big money behind the trades, just minus the emotional problems that go along with big money. May not work for everyone but I like it.
KNOW YOUR TRADE
I think there is a misconception out there that you do not have to know your trading strategy intimately, that you can just walk in and learn a couple rules and trading should just happen. Well, it doesn’t. I know first hand. If you don’t know the WHY behind your strategy, the how doesn’t ever click. You can’t follow a set of arbitrary rules if you can’t react to them appropriately when things go wrong. If you want the simplicity of a blackjack table, then go play blackjack. Simple rules. No gray area. Just a bet. Markets don’t work like that. Well I should say they don’t work like that at first. Once you learn the rules of price action, you can almost do the same types of things. Rule, bet. Rule, bet.
The best way to combat this though is to pick your one setup that has a how AND a why, and then focus in on that. One session, one trade, one concept. Then just get really fricking good at that. Understand the times when it works and when it doesn’t in context and then perfect it. You will love trading and might I say, NOT BE AFRAID OF IT ANYMORE.
You have to have confidence. Confidence is the greatest way to combat fear. Not cockiness. Not over inflated egos. True confidence that comes from hours and hours of working on your craft so you know what you know and no one will ever move you off of it. You know your trade. In and out. You are a master of your skill. That is confidence. And that never comes cheap or easy. It takes time and commitment and dedication. That’s it.
So, over the weekend. Decide what you are going to do to fight fear. It’s your number one enemy. I promise. It’s not account size or market makers or spreads or dealing desks.
It’s simply fear.
Have a happy weekend.