Afraid of Pulling the Day Trading Trigger?

Those who are having trouble taking losses, you are overweighing the loss espeically when you know your risk parameters, there should be no problem taking a trade.  All human have fear, but winning traders manage their fear while losers are controlled by it.  Traders often have the trouble of pulling the trigger as a trade with a potential loss can cause financial or emotional pain.

Fear...implies anxiety and usually the loss of courage. This definition of fear is useful in helping define the issues that traders face when coping with fear.

All traders have fear, but winning traders manage their fear while losers are controlled by it.

Winners take positive action in spite of their fears.

Fear of loss tends to make a trader hesitant to execute his trading plan. This can often lead to an inability to pull the trigger on new entries.

When fear of loss holds you back from taking action, you also lose confidence in your ability to execute your trading plan. This causes a lack of trust in your method as well as in your own ability to execute future trades.

You can see how fear can set in place a vicious cycle of recurring doubt and, in turn, reinforce a traders' lack of confidence in executing new positions.

Thus begins the analysis paralysis, where you are merely looking at new trades but not getting the proper reinforcement to pull the trigger. In fact, the reinforcement is negative and actually pulls you away from making a move.

In poker lingual.... you can't win what you don't put in the pot. You can be the tightest player in the world. You won't lose any money. But you definitely won't make any money.

Our minds automatically avoid pain for pleasure. This is how our brain is programmed. New traders who have the trouble of pulling the trigger associate a trade with a potential loss that can cause financial or emotional pain.

Do you imagine taking the trade and never pulling the trigger? Are you right on your analysis but are unable to execute just to watch the markets runaway from you? The biggest conflict that is causing this is your belief in pain.

This may be caused by your pain for loss or your need to be right. The need to be right is associated with the need to be perfect every time. If you are a perfectionist there is a conflicting belief that you must eliminate to trade successfully. Perfectionists believe that there is a "correct way" and a "wrong way". Taking a loss is considered the wrong way to them. Trading is a game of probability. And it is not about being wrong or right. It is about making money.

You must get used to dealing with uncertainty. There is no exact science in trading and nothing can be predicted in advance. However, with enough experience in the markets you will be able to smell market weakness from market strength.

For those who are having trouble taking losses, you are overweighing the loss. If you know your risk parameters there should be no problem taking a trade. Perhaps you are not confident in your own trading methodologies. Have you tested your setups? If you have a strategy that is 70% profitable, take the trade. Once again trading is a game of probabilities. If you have a proven setup with strict money management, you will be profitable. Have faith in your methods.

When you're having trouble pulling the trigger, realize that you are worrying too much about results and are not focused on your execution process.

For some people they are unaware that the markets they are trading does not fit their personality. If you like a slow market you should stay away from the S&P. Trade corn instead. Know your personality and find the market that suits you. This is one mistake a lot of traders make. Thus, trading is not only about understanding the markets. It requires self-understanding as well.

If you have a perfectionist mentality when trading, you are really setting yourself up for failure, because it is a given that you will experience losses along the way in trading. Again, you have to think of trading as a probability game. You can't be a perfectionist and expect to be a great trader. The objective should be excellence in trading, not perfection. You will be better off seeing trading as a series of opportunities. and your task is to create a plan that finds opportunities with potential rewards that are several times greater than the risks you incur.

Setups will never be perfect, and that's okay, as long as you exit trades when things don't go your way.

Use a clearly-defined set of entries and trade them exclusively. A lack of disciplined entries brings fear. Have confidence in your entries and trade them exclusively and give them time to earn your confidence.

Remember this, it's better to trade a set of mediocre entries with discipline and great exits than to trade excellent entries without discipline and first-rate exits. Changing your entries continually, tinkering with them, wasting time and money hunting perfect entries, will never give you confidence. There are no perfect entry strategies

Consider trading smaller positions to get the fear of losing out of your system and get yourself focused on execution.

And to conclude: Practice does not make perfect. Only perfect practice makes perfect.

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