Fear Of Trading - Deepstash

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How to Overcome Your Fears in Trading?

Fear Of Trading

Fear Of 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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Failure Rate In Trading
Failure Rate In Trading

This is on the higher side, with only about 20 per cent traders being consistently in the black.

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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.

Analysis Paralysis in Trading

Too much knowledge, analysis and theory can have an adverse effect, instilling doubt and uncertainty in every decision taken.

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Fear Paralyzes Action

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.

Visualize Yourself as Unafraid

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.

The illusion of control

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 and crisis

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.

Drawing up your own tests

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.