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How to Overcome Your Fears in Trading?
Trading of stocks and bonds has many variables and the uncertainty can lead to fear and anxiety. Fear is the biggest hurdle to overcome in this otherwise lucrative way to earn money.
Knowing about fear and how to overcome it can be beneficial for the newbie.
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This is on the higher side, with only about 20 per cent traders being consistently in the black.
This low rate of success in trading is due to many factors, knowing about which can help a ...
Anything of value in life requires mental and physical efforts and involves time, energy, and resources.
Just like becoming a highly-paid doctor earning a six-figure income requires years of hard work, becoming a highly successful trader needs a decent capital, emotional strength and years of toiling.
Too much knowledge, analysis and theory can have an adverse effect, instilling doubt and uncertainty in every decision taken.
A more effective way is to pick a few trading tools that suit you and leave the rest.
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Key Ideas
The most common reaction in a fear situation is the attitude of, “I can’t!”
This is the fear of failure that stops us from taking action. It often shuts down the brain and causes us to revert to the “fight-or-flight” reaction.
Your self-image, the way you see yourself and think about yourself, is eventually altered by feeding your mind these positive mental pictures of yourself performing at your best.
So visualize yourself performing with confidence and competence in an area where you are fearful.
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Stress testing is a standard technique used to test how someone will perform in the "worst-case" scenario. The problem is that the "worst-case" scenario is subjective, causing an illusion of contro...
Success in “normal” circumstances does not mean that you will succeed in a crisis since, in a crisis, the rules change. However, it can make you feel confident and make you highly vulnerable to the next crisis.
Your own incentives may support an illusion of control. If you draw up your own worst-case scenarios, you will always pass, but as a result, you will develop blind spots.
Encourage innovation in risk models to increase diversification and decrease risk.