Overcoming Fear When Trading


Staff member
Please don’t feel alone if you are currently feeling fearful and anxious when trading; you aren’t alone. Even on the most successful of trading days, it just has a way of wearing you down. In particular, this is true if you can’t seem to get a handle on the game’s mental side. Unfortunately, emotions have no place in trading, no matter what type of trading you do. Whether you day trade, swing trade, or participate in long-term trading, you can’t allow emotions to guide your decisions.

Think about it. When you are fearful and anxious, you try to put yourself in a protective place, a place of comfort. Often, we look for obvious signs of what to do next. It’s during times like these that it’s difficult to have faith in yourself and your decision-making ability. In addition, trading brings stress even in the most optimistic of times. It is common for traders of all experience levels to feel fear on some level. However, there are ways to overcome this fear. Here are some tips on how to overcome fear when trading.

Losing Out​

First of all, the fear of losing can push all of us to make irrational moves sometimes. When making a trade, the fear of losing can often have more than one consequence. This can cause a delay in your execution or timing strategy. Furthermore, it can lead to the inability to trade, sell, and buy, leading to all but freezing your trading.

Nevertheless, you need to be decisive when taking action in strategic new entries and exits; don't let fear stop you from taking action. As a result, you will come to doubt your abilities, and this, in turn, will lead to your inability to make confident decisions in the future as well.

Everyone hates losing, but it happens even to the best of us. The key is to lose only a little – less than you gain – thus, allowing you to stay in the game, both financially and mentally. The longer you remain in the trading game with sound strategies, the more experience you will gain, and the more confident you will feel in your decision-making. Don't forget, you have to be able to take a loss; get used to it.

Missing Out​

Additionally, a lot of people are concerned about missing out on the “next big thing.” Every trend has its followers as well as its doubters. Not every trend is a winner for ever, and some trends last longer and are more powerful than anyone would have imagined. Everyone wants to catch the big trend, but doubts that "this" is it; then they get jealous when other people profit from it.

This type of situation can be dangerous. This is because if you know something is trending and believe the sky is the limit, you will be willing to buy no matter what the price. If the stock ends up being a “one hit wonder,” so to speak, the stock will peak and drop quickly once the trend wears off. You could end up losing a fortune. Fear can cause you to overlook the downside, but it’s always there. There’s never an obvious winner. Something can always happen. Don’t let fear of missing out guide your decisions!

Profits Turning Into Loss​

It is common for people to like taking quick profits, but instead should be cutting their losses short and letting their profits run. Some traders feel like locking in that win makes them a winner. It does, but only in the short-term. Learning to be a successful trader requires a long-term commitment. Hold onto a stock until you have enough evidence that the trend has reversed. Real trends generally last a long time, generating huge profits. Make sure you don't let your fear of losing your profits cause you to pull out too soon. You may cut your own profits.

Not Being Right​

Last but not least, everyone fears not being right. Some people can’t handle being wrong. Don’t place too much emphasis on always being correct or proving you are always correct. Instead, stick with your strategy and learn to create positive results over time. Instead of focusing on being right at this exact moment, look at the long-term game.

If you want to succeed in the long-term, you may have to sacrifice a bit of your ego sometimes; you won’t always be right. As soon as you accept that, the easier things will be, and the more you’ll learn. Don’t let fear or greed rule you, but do be cautious.


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Happy Trading,

- B4 Team
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