How to Be Fearless in Your Trading

In a previous article I discussed how inappropriate fear is something that keeps people from their goals or making positive progress or reaching a level of fulfillment.

Remember, fear does serve us in some cases, but more often than not we create fears within ourselves based on misconceptions. So it’s really not fear that holds someone back.

It’s the ERRANT perception of the environment that causes poor choices.

Using the last post’s example of seeing a real bear on a trail in a forest vs. seeing a man dressed up in a bear suit, some may say “Hey, I’d rather be safe than sorry. I mean, if it is truly a man in a bear suit and not a real bear, then I would rather run and survive just in case it is a real bear! Who cares if it’s not a real bear! This way I will survive either way……better safe than sorry!”

Well, in this example they may have a case. However, in the world of trading and investing this “better safe than sorry” or “err on the side of caution” thought process can hurt you. In the previous post I gave an example of how, in the realm of trade management, Fear can play a huge factor in causing overall damage to your accounts.

But to help define the solution, let’s go outside of the world of trading and investing. Ever heard of the person who won’t start his/her own business because of being afraid of not having a steady paycheck? That Fear is based on their model of the world and it basically cuts off any sort of ability for the person to build up the guts to walk away from that steady paycheck.

Unless of course the steady paycheck ‘walks away’ from them. They get laid off or fired. Then they have no choice but to either “sink” or “swim.”

Some will be in Panic Mode. Some will be in Victim Mode. Some may curl up in a ball and go into a Paralyzed Mode. But there are others who may go into Defiant Mode. Proud Mode. Hungry Mode. Creative Mode. Determined Mode. Resourceful Mode. Fearless Mode.

The key is the MODE the person goes into (and this MODE is of CRITICAL importance to whether the person thrives and survives or withers and fails) or responds with depends on how much fear they are feeling due to their perception of what has transpired based on their model of the world.

And this is something ANYONE CAN CONTROL. And as I’m sure you’ll agree – you don’t ever want to respond like a Victim. Or become Paralyzed. Or start pushing the Panic button.

So how do you control it? The key is AWARENESS. If you take this information to heart then you are taking the first step…knowledge and acceptance.

The second, more challenging step, is stopping yourself in the moment. Stop, and become aware. Observe what’s going on in your environment. Ask yourself QUALITY questions. Pause and think and take yourself out of the automatic “Pavlov Dog” response. It’s not easy and takes time to develop, but is something that should be worked on consistently so one does not simply respond without thought and act in the same habits and patterns from the past.

One thing I started doing a while back is to set a “Reset alarm” for certain intervals during the trading day. For example, you can set it for maybe 5 minutes before a major report to do 2 things – one to alert you a report is coming and two, to get you to stop, take a deep breath and assess what you are doing/feeling/experiencing. It gives you a chance to get ‘outside’ of yourself. I encourage you to start trying something like this out if you have not already. You will be surprised at the perspective it may bring you.

Tom Willard has over 15 years of trading and investing experience and he trains and teaches others to make money consistently in the markets through simple and powerful techniques.

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