How to become a fearful profitable trader

By | April 5, 2014

While some traders are more likely to fall victim to greed (“How much could I make?!”), others have experienced loss in the market to the point where all they can see is the fear and anxiety (“How much could I lose?” or “How much could the market take away from me?”).

Let’s look at some resources to help us cope with these fears.

I recommend beginning with Price Headley’s article “The Four Fears of Trading” which lists and explains each type of fear – it’s more than just being afraid to lose money.  Headley lists the fears as the following:

  1. Fear of Losing Money
  2. Fear of Missing Out (on a Move)
  3. Fear of Letting a Profit Turn into a Loss
  4. Fear of Being Wrong (or not being right)

When we’re in a trade that we expect to be right and make money, but the price begins moving against us, we quickly feel the fear or anxiety.  We might have a stop-loss placed, but as price heads to that level, we may feel intense anxiety.  Worse, if we don’t have a stop-loss, we may develop the “Deer in the Headlights” syndrome where we freeze up, unable to take action as price moves quickly against us and the loss increases.However, fear goes beyond “Losing Money.”  It can cause us to jump into a price move, ‘afraid’ that we’re missing out on the move.  It can also cause us to exit a trade far too early (before it hits our profit target) under the “fear” of leaving money on the table (or specifically, “Letting a profit turn into a loss”).  To overcome it, we’ll hit the exit button on a trade that is showing a small profit when if we had more confidence and executed our plan, we would have gained a larger profit.When we feel the fear, we might take sudden steps to overcome it, whether that results in jumping out of, or into a trade.  It’s critical not to let the fear lead to unhealthy behaviors, habits, or harmful coping mechanisms such as alcohol abuse. In such taxing time what helps is having a proper trading system which you trust, We discuss the same in our trading course to help you emerge as a fearful profitable trader.

3 thoughts on “How to become a fearful profitable trader

  1. Bramesh Post author

    Dear Sir,

    Till it trades in cash market above 1220, you can hold your futures for target of 1260 and 1300 in short term. Any close below 1220 in cash market please exit the trade and go short for mentioned targets.

    RGds,
    Bramesh

  2. sibsankar

    Bramesh Sir, i am watching your website since last five months,your call about icici bank closed at 1240.15 in future.Can i bought 1 lot on Monday for a target of 1300?pls give me your valuable input.

  3. sibsankar

    Bramesh Sir, i am watching your website from last five months and this way i became a fan of yours,your call about icici bank on 04.04.14 closed at 1240.15 in future,can i bought 1 lot on Monday for a target of 1300.Can i trade your calls/advices in future also.Pls responce giving your valuable input. I want to learn about candlesticks chart,is it only open, high,low,close or anything more than that,Pls help sir to learn.Pls suggest a book.

    Sibsankar

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