Develop This Mindset to Eliminate Fear and Get the Results You Want

Mar 11, 2023

Fear is a primal emotion that’s within all of us. It’s a necessary response to danger to ensure our survival. In modern times, fear has also taken on a more abstract form, such as fear of failure, fear of rejection, and fear of the unknown. Most of the time, these types of fear hold us back instead of keeping us alive.

Trading does not put you in any life-threatening danger (like being in a cage with a tiger) but we still feel those fears. They greatly hinder out potential. This is one of the reasons trading has a very high failure rate (90-99%). If you want to avoid being part of that statistic, keep reading.

We will explore the reasons behind these fears, and how you can conquer them permanently. It’ll open the door to highly profitable and stress-free trading. Let’s dive in:

Fear of the Unknown

Our biggest fear in trading comes from the unknown. No one knows what’s going to happen next, so we never have the full picture. You’re never sure if you made the “right” decision beforehand because you’re making decisions with incomplete information.

To make matters worse, the market is designed to use your own fears against you. It’ll make you sell at the bottom and buy at the top. It’ll have you feeling overconfident or fearful exactly when you shouldn’t. Many get caught in this cycle over and over, and some never make it out. It happens to even the most experienced traders.

How do we avoid this? The first step is realizing that it’s wrong. Some people become comfortable being consistent losers. They’d rather please their ego and call the market “wrong” for not going in the direction they predicted. Unfortunately, this method doesn’t make you any money - and that’s not why we’re here.

To avoid being caught in the chaos, we develop a system with an edge. This way, we can choose the amount we’re comfortable risking and only expose ourselves to the market when we want. A lot of fear goes away when you realize you’re in control of your own actions.

Since our strategy has an edge, we have statistics on our side. If you have a 2:1 risk/return and a 50% win rate, you’ll make money over time. The hard part is finding and maintaining an edge, but I’ll expand on how you can do it in a future post. Backtest continuously to make sure your strategy works and tweak it if necessary. Nothing is guaranteed, but this is the surest chance you have to keep winning.

Now, you have a level of confidence that you didn’t have before. You’re no longer trying to make sense of everything that’s going on and always ending up on the wrong side of a trade. You have a system that steadily extracts profits from the market. All you need to do is follow the rules.

If you follow the recipe to bake a cake, and you’ll get a cake. Are cakes scary? No, but if you don’t follow the recipe and try other things, you’re gonna end up with something that’s not exactly what you wanted.

Fear of Failure

Now you know the path you need to take. Develop an edge, follow the strategy, and profit. It’s not too difficult with enough tries and the right mindset. Now we need to address the other type of fear that might be stopping you: fear of failure.

This comes in the form of hesitation. It’s the same hesitation that stops you from jumping in a pool. There’s no real danger from jumping in a pool, you just don’t want that initial discomfort of getting in the water. Once you jump in though, everything is fine.

When you first try trading, you play it safe. You read a bunch of books, watch plenty of videos, and paper trade for months. Then you try real trading and fail. The market is a beast with a voracious appetite for unprepared traders. It chews you up, then spits you back out. You realize that’s not how you make money trading.

With experience, you learn that to make real money, you must be as relentless as the market itself. Learn all of its tricks, aggressively search for opportunities, constantly sharpen your edge, and trade without fear or hesitation. Be ruthless in achieving your objectives. This shows that you’re no longer a frail little trader, hiding behind books and videos, too scared to trade for real.

Instead, you’re attacking the market from every angle, and always hungry for more. You re-emerge from every loss. This is the mindset shift you need. If you perceive the market as some evil system that’s impossible to beat, that’s all it’ll ever be to you.

If you perceive the market as a place of endless opportunities, you’ll have the drive to search for them. Your perception has a very real effect on your actions.

You wouldn’t have the drive to keep trying after many failed attempts if you don’t genuinely believe in yourself. You wouldn’t constantly be thinking about new strategies and opportunities in the back of your mind. You wouldn’t push yourself to perform at the highest level. You wouldn’t go the extra step needed.

All of these little differences in effort compound over time, and eventually separate a highly successful trader from a losing trader. In the end, the only factor that set them apart was their perception.

Perception is Reality

The only way to permanently conquer fear is to become familiar with the market through experience, then adjust your perception. Don’t be afraid of the market like everyone else. You’re not a sheep waiting for slaughter.

You’re excited to find opportunities to exploit every day, and you embrace whatever the market gives you. Internalize this. Your thoughts, attitude, and eventually actions, will drastically change for the better.

- Tradewriter

The Tradewriter Report

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