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How To Eliminate The High Cost Of Fear

fear

Traders lose more money in trading forex  due to emotions than anything else. You see it all the time. Every time you hesitate to make the right move, it costs you. Staying in a trade longer than you should and miss taking the profits off the table, you’re just denying yourself those profits. Every time you get out of a winner too early and cut your profits short is one more piece of proof that your emotions can be very costly.

In trading forex, “Once bitten, twice shy” is felt by everyone. The source of many emotional problems in trading forex is fear. Fear that because you’ve felt the sting of an avoidable loss before, that it will happen again right now. Hesitation comes from that fear, as well as staying in your trade too long and getting out too soon.

Other emotions are working on you too, for example anger, greed, shame, guilt, anxiety, pride, confusion, hope, despair, along with a whole slew of other feelings. Revenge is a big one too. When you’ve been hurt with a stinging loss that has you beating yourself up, revenge often comes to mind. You want to get back at the markets and reclaim your capital. It’s only human to experience this.

One of the problems is that trading forex is an activity that in many respects runs counter to our nature and everything that we’ve learned growing up. In trading, emotions tend to work against you, in their function as part of your survival mechanism. It is un-natural for humans to step into a potentially high-risk circumstance, get hurt (lose money) a significant portion of the time, just accept it, and then step right back in. Self-preservation is our natural response. In trading forex, you’re trying to deal with the unknown nature of the markets, in addition to trying to take in a huge body of knowledge along the way..

Gaining control over your emotions, or at least to the point that they don’t interfere with your ability to make good decisions and to act without hesitation with proper timing takes more than just will. You can’t just ‘force’ the discipline to stick to your system, at least not for long.

As your confidence builds, your fears will subside, plus you’ll find that it becomes easy to have the discipline to do the right thing when the time calls for it. Remember though, forcing it won’t work. Certain skills must be developed to make this happen, especially Emotional Intelligence.

Since for most, trading is an entirely new activity, this can be quite a challenge. Like any new occupation, trading forex requires a specific skill set to be good at it and to have the confidence you need. Most of the time when you move into a new occupation, you get trained for the job. Because the importance of establishing the proper skill set, most companies would put you through training to ensure you get established properly. Most traders never get that opportunity though. In any occupation, training yourself on-the-job is the most disadvantageous way to go about it, but even more so in trading forex.

In the past, about the best you could do was to buy a book on ‘Trading Psychology’, which is a conceptual approach to trading, and many books on the subject were written by psychologists, not traders. Emotional Intelligence is not a concept though, it is an ability and a skill. You don’t develop skill from reading, you get it from specific actions. Your skill grows and your paradigms shift from experience, not from simply acquiring new knowledge.

Training on how to become a successful trader has been largely non-existent until now. The trading system gets at least 90% of the focus with most training that is currently available, not how to develop your Emotional Intelligence as a trader. There is real trader training now available through the Trading P.I.T. Club by Inside Out Trading. The training consists of 26 weekly lessons specifically designed to eliminate your fears and give you the confidence you need to trade well, without the emotional influences that can be so costly in trading forex.

Article Source: http://EzineArticles.com/

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