Fear To Trade In Forex?

Throughout our lives, people are confronted with fear to a certain degree. Traders, both beginners and experienced alike, have to face their fears of Forex trading since it is still quite a risky business.


Are you capable of eliminating this emotion and becoming an absolutely fearless trader? Doubtful. The fear can, however, be minimized as well as become more resistant to it. The actual fear isn't so bad as the effect it has on traders: it paralyzes some, messes with their sharp minds, and affects their decisions. However, once you are able to control your fears, you unlock the new level of market opportunities.

The majority of traders will experience several trading fears during their trading career. Here is what we can do about two of the most common fears of beginners.

Having a fear of losing

Nobody likes to lose. This is a proven fact. Moreover, nobody likes to lose money. It's a fact of life that losses do happen in the Forex world, and if we can't always prevent them, we can change our approach to them.

Although being careful is important, avoiding risky situations out of fear is a sure-fire way to miss out on countless opportunities for success. The whole path of a trader/investor includes fear, along with taking risks and making clear judgments when making a difficult decision. What are your thoughts on this matter?

1. Never risk more than you can afford

It seems logical, doesn't it? A lower lot size will make trading more comfortable for you. It doesn't mean you have to trade the same $10 a whole bunch of times - just that there is no need to raise the stakes to the point where you lose sleep over it.

2. Open no more than one order at a time

When you first enter the market, this is particularly true. When you have more orders open, it is more difficult to keep track of them. This increases your anxiety. Having fewer open orders makes it easier to cope. View this video for a basic understanding of risk management and position size. Our FBS broker Forex Guidebook about controlled trading provides even more information about risk management and securing your funds.

3. Develop a trading plan and stick to it. Trading Forex requires classic indicators.

The trading plan is another essential step. It should be clear; it should be suitable for you; it should be followed stickily. That’s pretty much all you need. If you have a very clear and defined idea of when to enter the trade and exit it, it is much easier to overcome the fear of a mistake.

4. Create and analyze a trading journal

Maintain a trading journal to track your transactions. Building confidence in your system is the purpose of a trading journal. By trading with confidence, you can make objective decisions. If you review the notes you made about the trade setup, entry and exit, and your emotions, you are able to analyze the strategy and your own state of mind. In addition, it helps you manage your emotions and actions taken on the market.


Live accounts and the fear of them

A beginner trader is logically afraid of switching from a demo account to a real account because of the fear of "what if I fail". Even though demo accounts are excellent practices and a good way to learn about the market and system, let's face it - they aren't the same as trading real money.

To maintain control over your trading decisions, you must learn how to handle your emotions and overcome your fears when risking money. Below are some tips:

1. Create a cent account

Yes, a cent account won't make you millions overnight, but it will certainly teach you responsibility for your money. In case you are nervous, you may want to start with $50 rather than $1,000 immediately. Fund size isn't as important as results, so if you aren't able to perform consistently with $50, you won't be able to do it with $5,000. If you feel fear creeping in, make a few changes to see if that helps. Lower risks will give you clarity on your strategy, and withdrawing profit - even a small amount - will lift your spirits.

2. Just do it

The forex market entails overcoming your fears, as simple as that may sound, and it sometimes demands bold decisions. Don't forget, the person who never makes a mistake never does anything at all - so give yourself some credit. You may have yet to explore the market much, but that just means you have so much more to explore! Start small, don't be too impatient and work your way up to becoming a master trader.

You can be your own hero

Even a small victory is still a victory, and small changes can lead to big results. In order to overcome your fear, you must rationalize it: decide on your trading strategy, the one that suits your personality, lifestyle, and timeframe. Keep a record of your moves and follow your strategy to ensure you always can learn from both successes and mistakes instead of being afraid of both. Take a leap of faith and remember why you started trading.

Turn your fear into an opportunity by facing it. That sounds reasonable, doesn't it?

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