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InstaForex 16-08-2014 06:53

The Four Faces of Fear
The Four Faces of Fear #1 Today, 06:00 AM
Right now I'm reading Trading in the Zone, a book on trading psychology by Mark Douglas. This book has been widely praised, and discussed extensively here on InformedTrades; I highly recommend folks check out Larry Folson's course and Magic's Trading in the Zone review to learn more and check out some great resources that are complementary to the book.
Like many others who have studied trading psychology or have traded themselves, the book identifies fear as the primary emotion that blocks traders from succeeding. Specifically, Douglas refers to the four types of fear traders face:

1. Fear of being wrong -- creates agony over entering trades
2. Fear of losing -- this often results in holding on to losing positions
3. Fear of missing out -- leads to chasing price and poorly timed entries
4. Fear of leaving money on the table -- translates to holding on too positions too long and poorly timed exits

In terms of overcoming those fears, Douglas notes the importance of finding your edge and trusting it. Knowing your edge, gaining great confidence in it, and taking full responsibility of your trades is what Douglas prescribes as the antidote to fear.

These are simple concepts, but I thought they were worth highlighting -- especially for active traders, and those seeking to live the dream of trading for a living.

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