FEARS OF TRADING & HOW TO OVERCOME THEM

I recommend beginning with article " Fears of Trading" which lists and explains each type of fear - it's more than just being afraid to lose money. lists the fears as the following:

1.Fear of Losing Money

2.Profit Turn into a Loss

3.Fear of Being Wrong

1. Fear of Losing Money: The fear of losing when making a trade often has several consequences. Fear of loss tends to make a timer hesitant to execute his or her timing strategy. This can often lead to an inability to pull the trigger on new entries as well as on new exits. As a market timer, you know that you need to be decisive in taking action when your strategy dictates a new entry or exit, so when fear of loss holds you back from taking action; you also lose confidence in your ability to execute your timing strategy. This causes a lack of trust in the strategy, or more importantly, in your own ability to execute future signals.

2. Profit Turn into a Loss: Unfortunately, most market traders do the opposite of "let your profits run and cut your losses short." Instead, they take quick profits while letting losers get out of control. Why would a timer do this? Too many traders tend to equate their net worth with their self-worth. They want to lock in a quick profit to guarantee that they feel like a winner. How should you take profits? Once a trend begins, we stay with that trade until we have enough evidence that the trend has reversed. Only then do we exit the position..

3. Fear of Being Wrong (or not being right): Too many market traders care too much about being proven right in their analysis on each trade, as opposed to looking at timing as a probability game in which they will be both right and wrong on individual trades. In other words, by following the timing strategy, we create positive results over time. The desire to focus on being right instead of making money is a function of the individual's ego, and to be successful, you must trade without ego at all costs. Ego leads to equating the timer's net worth with his self-worth, which results in the desire to take winners too quickly and sit on losers in often-misguided hopes of exiting at break-even.

Conclusion

As a market timer, you must move from a fearful mindset to a mental state of confidence. You have to believe in your ability to execute every trade; regardless of the current market .Knowing that the timing strategy you are following will be profitable over time builds the confidence needed to take all of the trades. It also makes it easier to continue to execute new trades after a string of small losing ones.. You will win as you conquer the three major fears, gain confidence in your timing strategy and over time, and become successful (profitable) market traders.