In this article, we will look at how to overcome fear and trade with total confidence on every trading signal you place in the market and how not to be distracted from your plan by the fear of losses.
Most Peoples Fear of Risk
Society is very ordered for most people and their taught not to take risk, its seen as not the thing to do and you should always take the “safe option”. In fact most people want to avoid risk at all costs but this means, they never fulfil their potential and are stuck in a rut. The idea of risk brings out fear in many people but if you have a fear of risk, the currency markets are not going to reward you – why? Because by their very nature currency markets are risky. Of course, they offer huge rewards but only if you are prepared to take calculated risks and have no fear of losing.
If you fear risk then you need to change your view quickly and its a fact that most successful people see taking a risk as just part of the nature of making money – they don't fear risk they love it and know, that unless you take a risk, you are unlikely to make money.
To Win at Forex You Must Take Calculated Risks!
When traders come to trade the markets – they want to make big profits but they don't want to take a risk to do so which is ridiculous. They fear losing so much, they believe they are going to make money on most of their trades and not only will they win most trading signals they will only take very small risks on each trade. They believe the gurus, system sellers and brokers, who feed them the idea this is possible to make great profits with little or no risk but anyone should know, if there are big rewards to made there is risk present.
If you can't get used to the idea of taking a risk then avoid Forex trading because you will lose – the markets are not for you. There are a number of traders though who want to overcome their fear of trading and win and if you are one of these you should read on – and you will understand how to overcome your fear of the markets and trade your strategy with confidence and make big profits.
Learning to Love Risk – Overcoming Fear and How to Trade Like a Pro
The pro trader knows, that he has to take risks on every trade he places in the market, knows he won't win the majority of his trades but also knows, he can make money long term, by employing sensible money management and having a strategy which gives him an edge in his pursuit of profits. If you want to overcome fear, you need to enjoy taking a risk and not fear losing money so why do traders fear risk when trading in the markets?
- They don't have the right education and don't understand that the reality of trading is losing the majority of your trades.
- They don't have a trading strategy which they have confidence in and don't know their trading edge.
- They are trading scared money which is money they are emotionally attached to and cannot afford to lose it without hurting their lifestyle.
- They are trading positions which are to big in the market which makes them nervous of losses.
The above problems are easy enough to overcome. You need to read up on the reality of Forex trading and its helpful to read some of the stories of the great traders and how they view risk and how ALL these traders will take losses (normally more losses than profits) an will stress that having good money management and trading with discipline is the only way to win. These traders make hundreds of millions or even billions of dollars in profit and know to do it, they have to take their losses quickly and not fear them. Paradoxically, learning to lose without fear is the key to currency trading success.
Once you understand the above, you need a trading strategy which you understand and know its trading edge – its OK to take losses if you know, why you will emerge a winner long term but you won't be able to trade with discipline UNLESS,you know and understand the trading edge of your strategy. The understanding of your trading edge comes from education. You need to educate yourself and devise a strategy which you understand and have confidence in, to win long term and then you will be able to apply your trading plan with discipline.
In terms of trading scared money, if you feel you HAVE to win on your trading account, you will be under to much pressure to do so and will fail – so only trade risk capital. In terms of leverage used most traders use to much. While it's tempting to use all the leverage your broker gives you, to make more money on your trading signals, using to much leverage will see you lose quickly so cut leverage back, to a level you are comfortable with and have realistic profit objectives so don't try and get rich quickly – you will lose.
Risk is a Challenge and Makes Life Worth Living
Risk is not to be feared – its to be enjoyed. Risk is present in any speculation not just Forex and its the people who learn to confront it without fear who make money in life. If you want to become a successful Forex trader, you need to never fear the markets or taking a loss because as we have just said, accepting short term losses is the key to winning long term.
If you want to enjoy currency trading success you can – by seeing the reality of trading the currency markets which is a market, where learning to take losses without fear and controlling them, will allow you to make big Forex profits long term on a minority of trades which make money. Anyone can learn to trade FX without fear and we hope this article, will help you overcome the fear of risk and taking losses and help you, become a successful Forex trader from home.