Fear Is A Self-FULFILLING Prophecy
"Many are harmed by fear itself, and many may have come to their fate while dreading fate."
— Seneca, Oedipus
How very true the title of today's meditation is! We can become afraid of disastrous outcomes when trading. This can be derived from jumping on a trade with no research, no plan, no criteria, no strategy etc. We could be in a football trading chat group and somebody announces he is on a trade and we follow suit, rushing to grab some profit with no research of our own! If things start to go wrong then we are fearing a disastrous outcome and asking ourselves, why did we jump on this trade?
Fear can be dispelled however if we can control our impulses, keep our self control and take 100% ownership of our own trades. We need to be patient and disciplined 100% of the time. This means that when we enter a trade, it is because we have done our research and it fully meets our criteria from the stats/data available to us. We can then enter a trade with the confidence of knowing that we will be right, many more times than we are wrong. Because we are so in tune with our strategies and know them inside out and back to front, we know exactly how to react in a heartbeat should we be wrong. We will be wrong occasionally of course and that is when we need to kill our trades instantly without hesitation, taking a controlled red and not letting them run. If we fail to do this, we will be staring at a big loss; protecting our bank is imperative! If we blow our bank we can't trade and if we make a huge hole in our bank, we are having to slowly try and build it back up to where it was, which can be a huge setback and knock our confidence and generate fear. It can also be the cause of revenge trading as we try to get back what we've just lost immediately, on a trade that we shouldn't even have been on! The result? An even bigger loss!
As traders we can be our own worst enemies! We must trade what we are seeing unfold and not what we want to happen. We do not want to be the very source that causes our fear. Jumping on trades that don't meet our criteria and not exiting trades at our exit point if they go against us, will generate fear. Doing the right things and practising this, day in day out will make us more confident and free from fear, knowing that we are in control of what we need to do.
So let's control our impulses and keep our self control, by being patient and disciplined with the correct mindset for trading.