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Fear Of Losing In Trading: Why It Happens & Tips To Overcome It

fear in trading
If you are certain that you don’t want to be a victim of your own weaknesses, fear or confusions, the only way forward is to get your act together and be ready to do whatever it takes to live a bolder life.

This is an article that has been re-purposed as a ‘trading guide’ from Global Prime’s academy courses.

Fear of losing in trading is a big one as society doesn’t teach you how to lose. We’ve been conditioned to always aim for the wins, it’s just human nature. Therefore, a common pattern is that you are still not entering a trade when your system gives you a signal, get paralyzed after a series of losses, or your judgment to call a trade is impaired by the memory of the last losses, then a component of fear is affecting the way you trade and that must be addressed.

Because of the way our brains have been wired over history, we tend to seek security over risk. We tend to magnify the number of negative thoughts over positive ones. That’s just the way it is, unless, you train to think and act differently to avoid the constant activation of your primitive portion of the brain.

Fear can take many forms in trading, it can originate from the anticipation of thinking you will lose money, of disappointing someone if you don’t perform as expected, trading too large sizes, fear of not being good enough, fear of making a mistake, etc.

Firstly, you need to pinpoint what exactly you are afraid of and how bad that’s affecting your bottom line results. The practice of any activity that helps to calm and relax your brain such as deep breathing/meditation, coupled with internal dialogue, will make a tremendous difference in your ability to detect when an element of fear is hindering your trading.

In my case, I was able to build new neural pathways in my brain through the repetition of a direct affirmation that I wrote down 2 times per day for over a year back in 2015. It read: “it is like me to trade the markets without fear or tension. By trading without fear or tensions, I allow myself to participate in a statistically-backed winning strategy.”

What this does, is to reinforce my self-image about who I am when trading the markets. Besides, I’ve worked for some time now to identify and channel the negative connotations of fear as an energy so that it can permute to help me.

How do I achieve this? By transforming it into a vehicle that will help me push beyond my boundaries, working extra hard, building more skills, which leads to my fear of inaction far exceeding my fear of failure, hence taking more action to avoid inaction.

If you are certain that you don’t want to be a victim of your own weaknesses, fear or confusions, the only way forward is to get your act together and be ready to do whatever it takes to live a bolder life.

I’ve always loved the quote in trading that “fortune favors the bold”, which in the case of those suffering from fear, it’s a great reminder that in life, risk is an inherent part of living, especially when trading.

At the end of the day, it comes down to embracing a loss and seeing it as an event that takes you closer to the next win, release it and let it go, spit it out or will collude you. With that said, I invite you to watch this short-clip related to the topic of this article, fear in trading, as an extension of the thoughts I shared with you today.

About the author

Ivan Delgado

Ivan Delgado is a decade-long Forex Trader. Feel free to follow Ivan on Youtube. Join thousands of traders who follow Ivan's insights to increase their profitability rate by learning the ins and outs of how to read and trade financial markets. Ivan has you covered with in-depth technical market analysis to help you turn the corner.