It is natural to feel scared in currency trading especially since your hard-earned money is involved. Plus, considering the risks that the industry has to offer for both beginners and experienced traders, it is normal to deal with fears and all those mixed emotions.
Is it possible to eliminate all the emotions when trading? Especially fear? That’s a very hard thing to do. Rather than remove it, it’s better to say that you can minimize it and become even more resilient to it. Fear is something that can affect the mentality and the trader’s ability to decide. It paralyzes some traders, it cripples even the sharpest minds, and most importantly, it affects decision-making. Controlling your fears is the only way to get to enjoy all the market opportunities.
The Fear of Losing
This is one of the most common fears in Forex trading – the fear of loss. But who likes losing? No one does and more so if money is involved. Unfortunately, if you want to take part in the Forex market, you will have to accept that losses are part of the game. Although you cannot completely prevent having to experience losses, you can ultimately change the approach you have to it.
The first thing you can do is be mindful of your actions. Be careful and don’t avoid risky situations because these situations are the ones that offer the best trading opportunities. After all, fear is part of the whole trading path. Take risks but you also need to think clearly when making valuable decisions.
Don’t Risk Something That You Cannot Afford To Lose
So, how can you take risks without feeling immense fear? It’s simple – Don’t risk what you cannot afford to lose! As much as possible, you must lower your lot size to the degree wherein you are comfortable with. That doesn’t mean that you will have to trade $10 over and over again. The fact is, you only increase the stakes into an amount that won’t make you lose your sleep.
Avoid Opening Too Many Orders
If you are new to the market, you must take this tip very seriously. In the Forex market, the more open positions you handle, the harder it is to keep an eye on each one of them. When this happens, you feel scared and your anxiety rises. But when you have a smaller number of trading positions, you get to focus on the real deal. You also need to employ a good risk management strategy to avoid acquiring huge losses.
Create a Good Trading Plan And Always Follow It
Another essential in currency trading – a trading plan. You must be clear on the things that you want to achieve before creating a trading plan. It should also be suitable for your level as a trader. And most importantly, you must follow it diligently. After every trading day, you must also record your wins and losses in a trading journal. This will keep you on track with your trades. Those are the things that you basically need to trade effectively in the market.