The Mind Battles Of Trading/Overcoming Fear

The one thing that most humans find the hardest to conquer when they start of as a beginner is the mind battles in trading. They constantly check their profit and loss status and if it is even temporarily in the red zone for 5 minutes they panic. This is something you have to learn to conquer over time. Removing your attachment to money and focusing on the consistency of the technique and skill actually working is key.

When you enter a trade, all brokers have their spreads. This is the difference between the buy and sell price. So for instance, if the spread on USDCAD is 2 and your stake size is £1 per point you P/L will automatically start off at -£2. This is how the brokers make their money (amongst many other methods). Seeing your P/L in the red zone in the beginning of any trade is normal and is how it will start off in most cases depending if price movement plays out quicker than usual.


FOCUS ON THE MARKET, NOT THE MONEY.


Not every single trade you make will be a winning trade. What is important and what I do know is that you will end the month on top in terms of the balance your account begun with and the balance you will have at the end of a trading month, if you follow all the rules. Stay loyal to a strict 2% or below risk management rule so you will be in absolute control of how much of your capital you are risking per trade whilst aiming for double your risk per trade (when the set up occurs) which is 4%. This reinforces chances of trading success (and off course sticking to all of  the other rules at the same time)

Trading and life in general is all about perspective and the way you see things. Any time you do make a loss, the market is temporarily holding your money; it is not really a loss. That is the perspective I view losses from and I can definitely assure you that it works mentally.

 

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