How tro Deal With Fear inTrading

When you first learnt about the potential of trading, hearing lot of  rags to rich story, a normal person do get tempted and  probably venture towards trading.
But then, just before you started  trading, you heard stories of traders losing fortune and the Stock Market Scams of Harshad Mehtha, Ketan Parek and Satyam Scam . You probably heard of the large percentage of loss-makers and than fear sets in should we trade or not. Are market manipulated by the FII"s and Operators.
If you eventually managed to overcome that initial fear and traded, then you probably have to battle other fears each and every day. A common scenario is where you enter a trade on the prediction that it will go in a particular direction.
For example You took a trade in morning its making money for you as per your trading plan.After 1 hour trade achieves your intital target but it keep going up and up as per your plan.Then halfway into the trade, it starts losing. All of a sudden, your 10K gain of a few minutes ago has been reduced by 3K and sliding further downward.
If you give in to fear at this point, you will exit the trade to save the gains you had already made. Then a few minutes after you exit the trade, imagine seeing the gains returning and the trade closing just as you had initially predicted it would with 20K gain. Now that is how fear can ruin your trading and drain you psychologically.
There are various ways you can deal with fear and be a successful trader. Let me discuss few of them

1. Over Analysis of Trade.

Continue Reading