7 tips on how to overcome doubt and fear in trading

Fears can be passed down to you from your parents and grandparents. Research suggests that it’s possible to be conditioned to fear a scent that one has never smelled before. Is it possible that you’ll pass down your trading fears—fear of losses, FOMO, etc.— across generations? If you learn how to manage fear in trading, then no. 

This article will teach you how to get rid of fear in trading or at least how to keep it under control.

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Why doubt and fear are detrimental to trading success

Fear is part of human nature. And so is doubt. But there comes the point when you need to quiet both feelings down—unless you don’t mind them sabotaging your chances for success. In other words, doubt and fear can ruin your trading career if you allow them to persist.

Fear-based decision-making is one of the worst approaches you can take. When you let your worries dictate your actions or, in most cases, your lack of action, you lose any structure. Your trading plan and all your setups become pointless, which is a recipe for chaos. 

How to overcome fear in trading in 7 steps

These are the best practices for learning how to avoid fear in trading. 

1. Identify the cause 

You can’t let your fears remain hidden in the dusty regions of your mind. When you turn your face toward your fear, there is an opportunity to learn more about it and identify the cause. 

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Try to notice the patterns of when you start experiencing fear and what exactly lead to this feeling. 

2. Practice self-compassion

When it comes to any perceived failures, slights, and inadequacies, people tend to be particularly tough on themselves. Much tougher than they would treat others. But that creates even more negativity. Instead, give yourself the same kindness and care you would give to a loved one.

3. Stop comparing yourself to others 

When you compare yourself to others, especially successful traders, you can become frustrated with yourself for “not being good enough.” This slippery slope will likely lead to self-doubt and fear that you won’t accomplish something at the same level. 

Focus on your strengths and weaknesses rather than someone else’s. 

4. Face your mistakes

Another thing that teaches you how to overcome the fear of loss in trading is taking responsibility for your mistakes. Otherwise, you’ll be repeating them over and over, contributing to your growing fears. 

Don’t be ashamed of your mistakes or interpret them as evidence that you’re a bad trader. It actually takes courage to admit them.

5. Stretch beyond your comfort zone

The more you run away from discomfort or the unknown, the more fearful you become. As you can guess, you need to take the opposite approach. 

Get outside of your comfort zone, experiment with new strategies, and explore new trading instruments. If you stay in the “growth” zone long enough, you’ll no longer be afraid of it. 

6. Take decisive action

There is little room for greed or fear in trading when you have a solid plan of action. 

But if you feel indecisive about big trading decisions, practice making smaller decisions faster. Once you make a choice, stick to it. And then, slowly work your way up to bigger matters.

7. Keep a trading journal

Journaling is a therapeutic exercise in any line of work. The routine of writing down your concerns helps you keep track of them while also releasing stress. A trading journal helps you quantify your successes and failures and understand them (and yourself) better.

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Imagine how many new opportunities would open up to you if you learned how to control fear and greed in trading. And let that image motivate you to face your fears and doubts and work on yourself. Remember that there is no shame in experiencing some fear. Just make sure you keep your emotions in check – so that they don’t cripple you or push you to make mistakes.

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