Fear is one of our most natural subconscious responses, but it’s also one of the most important elements of trading. In this episode of Mind Over Markets, we’re sharing our own experiences with the fear of loss and how our own personal risk management strategies help us - and will help you - overcome the fear of loss in trading.
The important thing to remember about fear is that it will never go away. There will always be a little element of fear in everything you do, especially when the risks are high. That’s because fear is an innate defense mechanism. Fear exists to keep us alive, and fear helps us recognize and react to perceived threats.
For early humans, these threats were more likely large predators, but for those of us in the modern age, these threats can come in many forms. In trading, the threat could be to our income, our livelihood, even our emotional well-being. George believes in two different types of fear: fears that we need to listen to, those ones that truly threaten our wellbeing, and fears that are just a precaution or warning system. Understanding the way your brain responds to these two types of fears is your first step to overcoming the fear of loss when you’re trading.
Fear of loss is a real thing. In fact, loss in trading is an unavoidable reality no matter how good of a trader you are. You can’t win everything all of the time, and learning how to accept these losses will make you less fearful on the trading floor. We both know that working for a variable income like this is scary, and we’ve devised our own strategies for managing trade fears that will work for you, too.
If you’ve never had a risk management strategy in place, then right now is the time to start. This episode will help you understand the psychology behind your fear, including the brain functions behind it all, and give you tips for managing your own fear of loss so you can take on trading with confidence. It might be scary to step out of your comfort zone and risk your own money out here with the rest of us, but it’s also an opportunity to take control of your own success. Don’t be afraid of it.
In This Episode You Will Learn:
