ACTION: The Enemy of Fear
Fear is a huge issue with a lot of traders. And interestingly, not just fear of failure but also fear of success.
I think there are two keys to taming fear, you can never eliminate it so don’t even try. The first and most critical is the one noted above – action. Action can tame fear in an instant. But it needs to be the right sort of action.
____I personally have a fear of heights; so going bungee jumping may not have been the best way to address it! But that’s exactly what I did. There I was on a platform 250 feet above water, cursing why I got into this, but the only way to conquer fear was to jump and that I did. Do what you fear and the death of fear is certain.
In the same way, if you have a fear of losing your trading account, trying to face it down by putting it all on the line in one trade is not the best sort of action. But taking considered, appropriate action, like the strict use of stop losses is a way of taming fear and getting past the paralysis stage that fear can create.
The second key is focus. By this I mean keeping in the moment and concentrating on the immediate action that is required to move you forward.
If your focus is too broad you can become overwhelmed by the possibilities. Or you might start to worry about things that are beyond your control or simply don’t matter – like whether interest rates are going up or not.
But when you narrow your focus and remain “in the moment” in regard your trading, fear will be sidelined. The simple reason for this is that you can’t concentrate on two things at once!
And again, this will help overcome the paralysis that can be created by fear. So if you suffer from fear in your trading – action and focus are the only keys!
There is an old saying on Wall Street that the market is driven by just two emotions: fear and greed. Although this is an over implication, it can often be true. Succumbing to these emotions can have a profound and detrimental effect on investors’ portfolios and the stock market.