The Fear Of Losing

The Fear Of Losing has an evil twin brother at the other end of the spectrum -- Unrealistic Expectations.
Recognising, understanding and dealing with these two siblings is the first essential step to a succesful trading career.

The Fear Of Losing is a natural fail-safe characteristic in us all. Without it in everyday life we would be rash and hasty in our decision making. The Fear Of Losing makes us more prudent which can only be a good thing.
Unfortunately, in trading, fear of losing can suffocate initiative. It stifles impetus and enterprise; it can be a motivation killer. You become paralyzed by the fear of losing to the extent that you become afraid to execute any trade.

At the outset, the beginner trader needs to realize one essential truth in order to overcome his psychological fear of losing. And the truth is that IT IS NOT ABOUT THE MONEY. At least not at the beginning. Money will be the benchmark of a trader's success at the end of each month, but the focussing on win or lose on each trade is defeating. At the beginning, the novice should concentrate on the methodology that he learned and practiced during paper trading. Trading is a process, an implementation of proven methodologies and strategies and timing. If these are in place and being used correctly, the money will follow.

Tomorrow, perhaps we can take a look at Unrealistic Expectations.