The Fear Factor

What is the Fear Factor when it comes to trading?

Mark Douglas said it the best…

“ ​​What you fear is not the markets, but rather your inability to do what you need to do, when you need to do it, without hesitation.”

It’s a profound statement. 

In other words if you have confidence in what you’re doing, then execute your trades as planned. 

Yet so many traders put in the time and effort building a formal trading plan, then, inexplicably, don’t follow it.

Research suggests that different parts of the brain are used for planning and other parts are used for following that plan. So even if you have strengths in the former, it doesn’t mean the latter is going to follow. 

Fear is a factor that can throw into a spin even the best laid out plans.

Mark Douglas in his book ‘The Disciplined Trader – Developing Winning Attitudes’ states that fear is a high degree of negatively charged energy that can have a profoundly limiting effect on the range of information that we can pay attention to. 

Fear creates blind spots. He goes on to state that to prevent blind spots in our perception, we have to learn to trade without fear. And to do this, we need to trust ourselves to confront and accept whatever information the market is providing us, at any given moment. 

So it becomes a trust issue.

Many endeavours we do in life require a degree of trust in ourselves. Whether it be driving a car, crossing the road, or trading. We need to consciously work towards trusting ourselves to act without hesitation, regardless of the conditions. 

There is no doubt that markets can wreak havoc on our lives, yet only if we allow them to. To become successful traders we need to believe that we can win through having an absence of fear. Sticking to your plan allows you to trade with clarity throughout the process – on trade entries, during the trade and on trade exits. 

So following your plan and strategies are important, yet mastering the markets requires a high level of self mastery. And this means taking fear out of the picture.

Removing fear will be a major step towards your future success.