3 Steps to Beat Your Fear of Failure in Trading

Fear of failing is a universal feeling that almost everyone has or will experience; it is the number one factor that stands in our way of achieving something that we want and/or reaching our goal(s). As a child perhaps it was a fear of being the last person chosen to be on a team. This same fear is something that directly effects us as adults, mind you the circumstances are usually a bit different.

As a beginning trader and even an experienced trader, we face challenges daily and the stakes are a bit higher than being chosen for a team. The decisions that we make will impact our day to day lives financially and potentially our loved ones as well. Suffice to say it is good practice to do everything in our power to move past this fear into acceptance and learn from our mistakes.

FORMULA TO OVERCOME TRADE EMOTIONS

1. Fail Quickly

As trade decisions are made give yourself a task that will remove you from the stressful situation. Many trading platforms are equipped with audible alerts and even email or SMS alerts, use this technology to walk away from the computer to get a fresh perspective and to occupy your mind elsewhere. This way, when you return to find the trade outcome it is known instantly and therefore not a constant weight on your shoulders. In doing so you are taking precautionary steps to alleviate the fear of losing money.

2. Fail Cheaply

Risk management is of the utmost importance for each and every trade. Having a trade plan to identify large reward with low risk is a great way to accept a small loss when it occurs. Losing is a part of trading and should be planned for in advance. If we are taking a huge loss we may not be able to recover both mentally and financially. Small losses allow for longevity and help to reduce the fear especially when you see a large winning trade.

3. Never Fail the Same Way Twice

Each winning trade is a great feeling and produces a sense of power, however we tend to learn much more from our losses. Anything that hurts causes us to spend more time thinking on the matter instead of just moving on. Use this time to study the actions that were executed correctly versus the ones that were executed incorrectly. By noting this in a trade journal, it allows us to review and make sure that we make every attempt not to let the incorrect occurrences happen again.

The last thing that we want to do is lose at anything, however that is a part of life and certainly a part of trading. You don't want to waste your time fearing the possibility of losing when we know it is inevitable. Instead make every effort to accept it and allow yourself to move forward. In the words of Bruce Lee "Don't fear failure. - Not failure, but low aim is the crime. In great attempts it is glorious even to fail."