From my years of trading, I’ve observed that a trader’s inability to truly make it big in the forex market, more often than not, stems from fear.
I’m sure you know what I’m talking about. After a strong profitable month, you probably feel anxious to trade again for fear of losing your recently gained profits.
If you do take another trade, you may find it difficult to stick to your tried-and-tested strategy. You may even avoid depositing more money into your account even though you have the skills to become consistently profitable!
Don’t worry, a lot of traders have experienced this kind of fear.
It’s the fear of being stuck, the fear of ending up where you started, and the fear of not reaching your trading highs again.
How can you get past this fear of losing your hard-earned gains? Here are three steps that might help:
1. Recognize your fears
The first step, like with all problems, is to recognize and accept that the fear is indeed there. Being defensive or in denial will do you no good, as you’ll ignore the problem.
Know that being fearful is nothing to be ashamed about. Like most trading psychology issues, fear is just another hurdle that you need to work on.
2. Remember that trading is a business
There would be months when you’ll be on a roll and the moolah would keep pouring in. But like every trader out there, you would also experience losses.
Those who haven’t handled their fear would take losses as a sign that they were right to stay in their comfort zones.
But if you’re in the trading-is-a-business mindset, then you can accept losses as a cost of doing business and move on to how you can improve your processes.
3. Stick to what works for youOnce you’re in the business mindset, it’s time to capitalize on what has made you pips before. Get back to your basics. Look through your forex trading journal and see what was working for you and what didn’t.
Continue doing what works and change the things that weren’t.
Of course, you will never completely eliminate your mistakes, but limiting them and sticking to what initially made you successful will go a long way in helping you cast away the fear.