Getting over the fear of placing trades and FOLLOWING THROUGH

Discussion in 'Psychology' started by scorcher8196, May 25, 2013.

  1. Hey

    Does anyone have advice on how to get over the fear of simply placing a trade?

    When a trade opportunity comes up and all my criteria are met, for some reason I'm not pulling the trigger. Under my system, after buying I'd place stops to keep the possible losses limited and known, however this is just another small hump that I have to get over.

    I've thought of using buy stop limit orders and constantly re-adjust them to the desired level I prefer so that when it's time to buy - it happens automatically and remains out of my control. I'm unable to use automated trading software with my broker to get over this problem.

    Thanks
     
  2. What is the worst that is going to happen? You get stopped out.
    Move on to the next one. You are going to be wrong at least 50% of the time, the sooner you accept this, the less fear you will have.
     
  3. Scorcher,

    I've been where you are now, and advice like stockbroker offers would seem to make sense, but it's not enough. First off, can I assume that you have tested in some way, your trading methods, and that you know that it/they make money over time?

    If not, then that is the first thing that you must do- you have to be able to have confidence in your trading system.

    That said, it is my guess that when you see a signal to take a trade, you are asking yourself- "what if this is a loser?", or "what if I get stopped out?". In this case, you can muster up all of the willpower that you can, but if you imagine the trade costing you money, then you will not take the trade. Your imagination will overpower your will to trade every time.

    The way to overcome this is to-

    1. Have confidence in your trading methods (as I noted above).

    2. Perform some simple mental rehearsal to create the image of the trade being a winner, and picturing what that feels like. See yourself taking the trade- rehearse that over and over in your mind. Mental simulation.

    3. Associate emotional pain with NOT taking the trade, losing the money that you might have made if you had taken it. Picture in your mind what it would feel like to see the winning trade get away, and the money that you could have made, not coming to you.

    I am making some assumptions about your state of mind when you freeze up, so if I am not correct, please provide some more detail, and I'll see if I can help. Like I said, I've been through this, and the above works.

    Regards...Kevin
     
  4. Trade it on small enough size that the fear disappears.
     
  5. Get yourself an edge that can clearly give you positive expectancy and the fear goes away.
     
  6. bau250

    bau250

  7. MrN

    MrN

    Get a heavy punching bag and beat the shit out of it until you can't stand on two feet and fall to the ground. Then get up again and beat the shit out of the bag until you puke, are dizzy and in pain, with bruised and bloody knuckles.

    At that moment, ask yourself who you are and what you want in life.

    If you "want this" then from that moment on you will have few problems pulling the trigger. If you don't "want it" then fine, move on. No more harm or wasted time.

    If you can't get a heavy bag, most anything in the spirit of the above will work.

    If this fails to create a decision point, you are fooling yourself. Find something to do that you actually care about. "caring" and "thinking you care" are not the same thing.
     
  8. nkhoi

    nkhoi Moderator

    Clearly you didn't believe it will work out. Focus on taking stop loss instead. Paradoxically the more you fell comfortable taking a loss the easier to put on a trade.
     
  9. All these answers are general answers for traders everywhere. But there is an answer much more specific to you. To find it, I need to ask you to think back to the day you first decided to trade. Why did you decide to go for it? When the potential of trading first clicked with you, what did you see trading doing/being for you that made your heart skip a beat?
    Here are some generic possibilities. Try to get as specific as possible with your own answer.
    You saw it as a way to get out of your job? Retire early? Retire securely? Become rich? Prove how saavy you are? How good at problem solving you are? Take care of your family better?

    Somewhere under the surface there will likely be some element of "I NEED this to work." Try to isolate that reason. Example: "I feel inadequate as a provider and I feel like a loser for not taking care of my family as good as they deserve. If I was rich I would be able to take care of them better and, therefore, would be a better person. I need trading to work so that I can feel like a good person."

    Once you figure that out, consider that the reason you can't pull the trigger is because you are not fully confident in your ability to use trading to achieve that outcome, and you'd like to know as soon as possible the answer to whether or not trading is even a good idea. Each single live trade, then, is used as an attempt to get more "proof" or assurance that you are making the right choice by trading at all! It's kind of a secret "deal" in your mind. "If this wins, I know I'm making the right choice by trading. But if it loses, I should probably give up this foolishness."
    But since you "need" this to work, the idea of having a losing trade that proves you should not be trading at all is unbearable. But, so long as you keep botching trades, you'll always have an excuse as to why it didn't work, and never have to give up the hope that this could all work out. The dread of possibly learning that trading is a bad idea - forcing you to give it up - causes you to get squeemish on the follow-through and deviate from your system.

    The good news is that getting over this is as simple as deciding one trade doesn't prove anything. Your head might already know that a single trade doesn't prove anything, but your emotions are in charge. They need to know this as well.
    Instead of telling yourself, "One trade doesn't matter," - which your emotions will vehemently disagree with as soon as the next set up arrives - try making the decision to get off the fence. Are you in or out? Are you a trader? Or not? If your next trade is making the decision for you while your heart is hoping the answer is yes, you'll never surrender control enough to let the trade do it's thing without your interference. I can tell you with 100% certainty that if I asked you if you were a trader, your heart would say, "Yes, if I can make money."

    There cannot be an "if." Accept trading as your identity. Decide that this is just what you do now.

    Once you overcome this, you should have an easier time taking a more long term approach using the law of averages to your advantage.

    My risk limits allow me to lose 35 times in a row before my account size is cut in half. So when I test out my system, I "risk" 25% of my account by deciding I will trade this method for the next 15 trades un-interrupted. If I can't come out on top after 15 trades, I need to stop and re-adjust something and try again. Until then, I know nothing.

    I hope this helps. To reiterate, you are not able to follow through because your next trade is deciding whether or not you are a fool, and your heart is hoping the answer is "no." Just decide for yourself that you're not a fool for trading and the next trade will lose its power over you.
     
  10. #10     May 30, 2013