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Overcoming Fear in Trading to Prevent Deterioration

For new traders in the forex market, they often feel fearful, ranging from the fear of missing entry to the fear of placing positions incorrectly. To prevent fear from escalating, there are several methods you can try. Diving into the world of forex trading is like embarking on a new journey filled with challenges. Naturally, when you start, you'll be very enthusiastic about all the challenges ahead. However, along the way, various trading fears can arise. If you've ever felt afraid of missing an entry or afraid of placing positions incorrectly, don't worry. Both of these types of fears are common among novice traders. Instead of continually being burdened by the same fear, it's better to try to address it. How? Let's take a look at some "treatment" steps to overcome trading fears below.

Types of Trading Fears

  1. Fear of Missing Out on Entry (FOMO)
    Have you ever heard of the term FOMO or Fear Of Missing Out? In trading, this term describes the fear of missing entry moments, thus worrying about not making a profit. Traders experiencing FOMO will feel excessively anxious, leading them to make entry decisions based on the principle of "just profit". For example, suppose a currency pair has formed a fairly long trend. For traders experiencing FOMO, they will immediately open positions even though the price trend has been strong for a long time or even showing signs of slowing down. Such decisions are made solely out of fear of not making a profit. FOMO is not only experienced by forex traders but also by stock, commodity, and crypto traders. The main cause of FOMO in trading is traders' inability to control their emotions during trading. Fear and greed are two main factors that affect emotions during trading. Typically, traders experiencing FOMO will make many transactions in a day, known as overtrading. Moreover, any decision made suddenly without careful consideration can actually lead them into high-risk trading. This condition can disrupt the mental health of traders, and even lead to stress and depression.

  2. Fear of Making Wrong Decisions
    This type of trading fear often occurs in traders, especially beginners. This fear makes traders hesitate and reluctant to enter the market because they are afraid of making wrong decisions. Due to too many considerations, traders can miss important moments that are actually very profitable. This fear is usually caused by a lack of confidence in the trading strategy being used. Traders suffering from this fear are often perfectionist types. They demand a perfect trading strategy without any flaws.

Ways to Overcome Fear in Trading

  1. Create a Trading Plan as a Guide
    As a trader, a Trading Plan is crucial for achieving consistent trading results if applied with discipline. A proper and objective Trading Plan can help traders manage their emotions well. Even if trading results do not meet expectations or price movements go against predictions, traders can still take the best steps without hesitation and panic. Some important points that should be included in the Trading Plan include entry strategy, Risk/Reward Ratio, Stop Loss and Take Profit levels, and recording for the evaluation of Trading Plan implementation.

  2. Master Trading Knowledge Before Starting
    There are many ways to improve trading knowledge, from reading books about forex trading, having a mentor, to joining trading forums or communities. The key is never to stop learning. The more knowledge you have, the better your ability to read price movements in the market.

  3. Seek Mentoring from Professional Traders If Needed
    Although some traders prefer to learn on their own, having a mentor can be very helpful in the learning process. A good mentor will provide evaluations and advice on trading, be it strategies, Money Management, or trading psychology. Make sure you choose a quality and trustworthy mentor.


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