Hey hey, what's up my friend, so in today's episode right i want to talk about how do you overcome your fear in trading right because here's the thing i know you know you have fear in trading. You know right now what, if i click the wrong button and i blow up my entire trading account right now, i'm not sure if you have that thought right, but that actually occurred to me right in my early years of trading. So in today i want to share with you some of the common fears in trading and how you can overcome them and uh before we get started. I just want to credit to mark douglas because he came up with something called the four fear of trading, so i took that concept that idea and tweak it, and in today's episode i will be sharing the five fear of trading and how you can overcome it.

Alright, so fear number one is the fear of the unknown: hey rainer uh. What if i put on a trade - and i you know, lose everything what if i lose all my money, you know hey rainer. What, if i put on a trade and a piece of news, come up, you know i end up wiping out my entire trading account. So these are the fear of the unknown.

You have no idea what you're getting involved with you know. You have, the fear of you know just losing money for nothing and you don't want it to happen so to overcome the fear of the unknown. You have to expand your knowledge, it's just like you know, driving a car. If you take someone who have zero trade driving experience - and you put him in a car - guess what that person will be a road hazard, he will be afraid of everything and anything because he doesn't know what he's getting involved with.

Where is the accelerator? Where is the brake? What is the steering wheel? Fear of the unknown? He doesn't know he's completely blind up here and the way to overcome that fear is to gain knowledge, gain the relevant skills and expertise, and it's the same for trading. If you are a blank blank, if the here is blank, you must expand your knowledge right. Read books take up courses, listen to podcasts, listen to the training of rain issues, expand your knowledge and once you have acquired knowledge once you have upgraded your skill set, then the fear of the unknown is minimized. You won't know everything still out there, but you will know enough right so that you're not a hazard to others, you're, not a hazard to yourself.

Okay. So if you are suffering from the fear of the unknown, go and expand your knowledge number two, the fear of losing hey, rainer. I have no idea why every time i put on the trade, my losses are always larger than my winners right. Why are my losses? Always larger than my winners what's going on, then you have the fear of losing right.

You are so afraid of losses, because you know you always hurt. Your trading account losing 50 60 blowing up multiple trading accounts, so the way to overcome the fear of losing, or rather the way to manage your losses is very simple: it's all math, simple, math, okay, so it's all about risk management and position sizing, and i can't Go into full details in this short episode, but if you really want to learn it just go down to my website trading with reno.com search for uh risk management right, and i have articles and uh videos right dedicated to helping you manage your risk right and do Proper positions such that you know every time you put on a trade, even if that trade goes against you, even if that trade hits your stop loss, the loss right will be contained the law, so it will not be more than one percent of your trading account If that's something that interests you just search my website for it for that right, risk management and you'll find something a resource right that will assist you with that. That's the that's how you overcome the fear of losing right by practicing sound risk management. The third thing right, the fear of being wrong man.

I know i hate losing right losing sucks. I get it right, nobody likes losing. We are brought up in environment scenes where, since you were young right there, you know you must be correct right when you're correct, then you get uh. You know praise you, get appreciated and stuff like that, and i don't like that teaching, because it trains, children, it trains, kids right to be perfect, to not make mistakes and to not be wrong.

Okay - and this is bad right, not just in life, but when it comes to trading it's disaster, because in trading we are dealing with probabilities. Let's say every time you toss a coin, you get you make two dollars when it comes up hit. If it comes up till you lose a dollar and clearly when you come up till right, you lose one dollar each time and you hate being wrong. But if you learn to look at this at the grand scheme of things, you realize that this is all probabilities.

This is all about the law of large number. Nothing is certain trading is all about probabilities. Never certainty tossing. That coin is all about probabilities.

Never certainty, opportunities out there in life in the markets is all about probabilities, never certainty, and you must embrace probability. You must embrace right that, even if all the stars are aligned can still be wrong. That's trading! That's life, okay, so the fear of being wrong. I get it it sucks, but you must embrace it because if you can't embrace it, it's going to be very difficult right to trade.

Well, okay and another tip that i have for you is that if you hate being wrong, if you hate losing, there are ways around in trading right. One way you can go about: it is to adopt trading systems with a higher win rate. So here's the thing right, not all trading systems - are created equal, for example, a trend following system. It wins about 40 of the time, but the reason why trend followers make money in the long run is because their winners are larger than their losers.

For every. Let's say every dollar that they lose: they make two dollars in return on average, so even with the 40 win rate trend, followers can still be profitable in the long run and, of course, that's not the only way to make money right, uh mean reversion trader right Mean reversion in the stock market, that is, on the opposite end of the spectrum. You have a higher win rate, a 70 win rate, usually on average, and this is really for those of you who hate being wrong. If you want to have a higher win rate, you can consider, you know trading mean reversion trading systems in the stock markets.

Uh one example i have is the pullback stock trading system. Uh again, you can just uh i'll put the link below or you can go to my website tradingwithrainer.com and you learn more about it. So these are trading systems with a higher win rate and of course it's not. I know all all perfect with a higher win rate trading systems.

The downside is that your average gain to loss right is slightly different, so let's say for every uh dollar you lose right. Your return might be, let's say, 70 cent or 80 cent right, meaning your losses are actually larger than your winners. But the reason why this work out mathematically in the long run is because of your high win rate, so you're someone who hates losing right. Maybe trading systems with a higher win rate might make sense for you, okay, so this is how you overcome right, the fear of being wrong right by embracing probabilities and adopting systems with higher win rate, the fifth one, the fear of missing out arena.

You know i missed the bull markets. Ah right now. What now so yeah you know, missing trading opportunities is again right, part and parcel of trading right. We are not able to catch every single move out there in the markets, but we can definitely minimize that from happening.

So two tips to share with you number one systemize your trading approach. If you can adopt a quantitative trading approach in your own trading, that's better because it can help you scan the market universe, to make sure that you don't miss out any trading opportunities. So this is more towards quantitative trading systems trading right. So for this discretionary traders, another approach, or rather the way up, is to set alerts right on your own trading.

So, for example, trading view. I believe it allows you to set uh alerts right whenever the price comes to a certain level set alerts, all right, so you'll be notified. Whenever the market reaches a level of your interest, i think via sms or email or whatsoever. This is how you can actually overcome right, the fear of missing out and uh finally right, the fear of giving back profits.

Ah right now i'm up five hundred dollars and then the market reverse and take all my profits right and i'm down a negative 100 at the end of the day. Fear of you know giving back my profits so uh one thing to share about this is that giving back profits right is uh. It depends on trading methodology, for example, if you are a trend follower where your goal is to write trends in the market, then guess what you have to be comfortable, giving back open profits, because that's the only way you will write a trend. You know that a trend right it doesn't go up in one straight line, it goes up, retrace goes up, retrace goes up retrace, so the way you're going to write trends to capture trends is that you must use a trailing, stop loss and here's the kicker right.

You never know if the market is going to make a retracement or a full-blown reversal. You never know that's why you have a trailing, stop loss in place and by not knowing the market, whether it's going to make a full-blown reversal or pullback. You have to accept the fact that sometimes you will have the market hit, your trailing, stop loss and then reverse back in your favor, and - and this means that you know you will. You know stop get stopped out of your trade prematurely and there will be times right where the market hits your training, stop-loss and you're glad you know you got up at your trailing stop-loss, because the market reverses and collapse.

You know all the way down and here's the thing, no matter which scenario it occurs right for the market. The market must hit your trailing, stop loss and when it hits your training stop loss, you have to give back some open profits. That's the nature of trend. Following that's the the the fact right of riding trend, you have to be willing to give back open profits if you want to write trends.

So if you have the fear of giving back open profits, you don't like this approach, then don't go with trend following that. Isn't for you, then? What you want to consider is a swing trading approach where you look to capture swings in the market, so, for example, if you are buying at support, you can look to sell at resistance right, so you're just capturing that just at one swing that one moves. That's it right. So in such a trading methodology you have, you are, i won't say you can avoid giving back open, open profits all together, but it is minimized right compared to someone adopting a trend following approach.

So if you hate giving back open profits, consider going with a swing trading approach right, capturing one swing, maybe at a swing high, a resistance, etc. Okay, so a quick recap to what we have just discussed today: number one fear of the unknown overcome by expanding your knowledge. Number two fear of losing overcome by practicing sound risk management, number three fear of being wrong: embrace probabilities right and adopt systems with higher win rate number four fear of missing out what you can do is uh adopt a quantitative approach where you are scanning the markets Or set trade alerts right for discretionary trader number five, the fee of giving back profits. You can adopt a swing trading approach to minimize that from uh happening to you.

So with that said, i wish you good luck and good trading i'll talk to you soon. You.