A trader's top five worries that keep him awake at night
Hello Trader! These weeks are getting TERRIFIC... Halloween is coming, and the spirits of past trades are coming to keep us company. Are you ready to hear from them?
Trading can be very lucrative, but it is also very risky because the market is constantly changing and it is not possible to know exactly what will happen in the future.
It is important to be aware of all the concerns a trader may have before starting to trade the markets. Here are some of the concerns that might keep you awake at night.
Worrying about losing money When we are afraid of running out of money, we tend to tighten our belts and save to compensate for the possible future loss, or to be able to face new day-to-day needs that have not yet arrived. And although it may seem fine to worry about running out of money, you have to be careful, because saved money loses value, and above all it loses its usefulness.
Ideally, as a trader, you should place part of your savings in well-researched investment funds, which will allow you to earn a return over time, and dedicate part of it to trading the markets. Because yes, we have to be prepared to lose a considerable amount of money in order to recoup a larger amount in the future.
Being out of the loop The stock market is huge and millions of situations happen in it that go unnoticed. This fear is related to having the feeling of not knowing what is going on, and therefore not participating in certain trades even though you see them as having a high probability of success.
With thousands of companies and millions of shares, it is very easy to lose track of what is going on. That's why, if you make a living from trading, you need to be very familiar with your industry, following specialised media outlets including professional traders who can comment on the progress of your investments.
Fear of missing out (FOMO) Fear of mising out** While the amount of money made can be very significant, a trader who is only looking to make money is likely to find himself trading for long periods of time without any profit, entering any trend without stopping to reflect on its possible outcome.
This evil spirit of trading is responsible for causing us to panic when we see a stock rising in value, and we feel that if we do not follow the trend we will be making a big mistake, risking being caught out when the markets move against us within minutes of entry.
Lack of control over trading. It is easy to get carried away by a run of trades that have gone well, and then allow ghosts to make you make decisions based on your ego, how well you are doing and how good a trader you are, without taking into account the technical analysis of the charts.
Fear of being wrong The ultimate fear of every trader is to be afraid of being wrong. But you should know that in this profession you are very likely to lose money, so it is important not to get depressed by losses. Learn to manage this fear and take comfort in the fact that it is a lesson learned and that with more training and practice you can manage to avoid these situations.
When it comes to trading, you should only take action when it is highly likely that a trade is going to be successful, or take the risk if the probability is lower. You should never take the easy way out, or stop cold and let a loss turn into a defeat.
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