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In the course of learning more about trading psychology, you’ll have probably read or heard about the impact of trading instincts.
Trading instincts refer to that feeling or intuition you get when you’re about to make a financial decision. It’s usually based off experience or information you’ve acquired throughout your trading journey.
The concept of trading instincts is however essentially broken up into three core parts, sensory derived bias, avoiding the vague, and tangibility of anticipation.
Avoiding the vague is an interesting one. It pertains to the fear of that which is not known, and the act of avoidance that comes with it.
In other words, avoiding the vague involves refraining from action due to uncertainty about whether an event or outcome will occur or not. In the context of trading, this may be attributed to the fear of potentially losing one’s money.
Fearing the unknown is not uncommon in trading, particularly amongst beginner traders who lack the skill and experience to handle market complexities. There are however a variety of ways to better handle this fear to achieve more successful trading outcomes.
For one, a trader may fear the unknown if they lack information about the different markets. This may also lead to feelings of uncertainty because of the unpredictability of those same markets. Engaging in ongoing learning and research is essential to overcome these fears, as is monitoring relevant news and/or trends.
Additionally, traders may also fear implementing different trading strategies or consulting different news sources because they’re biased towards what they’ve utilised or have been recommended so far.
Tackling bias requires having an open mind, being mindful of your behaviour, and being willing to adapt based on outcomes.
Interestingly, there are also those traders who allow the fear of loss to supersede their motive for making gains. As a result, they may refrain from taking financial decisions altogether, resulting in missed trading opportunities or potential profits.
Understanding that loss is common in trading and adopting effective risk management techniques may mitigate this fear.
To overcome fear and succeed in trading requires developing emotional resilience to be able to handle responses like fear, panic, or anxiety.
Useful tools to help manage these feelings and build confidence include keeping a trading journal and sticking to an effective trading plan.
Furthermore, traders may further alleviate their concerns by engaging with and seeking guidance from experienced professionals, especially during periods of high market volatility.
T4Trade, with registered address of F20, 1st Floor, Eden Plaza, Eden Island, Seychelles, is a trade name of Tradeco Limited.
The Group includes Damadah Holding Limited with registered address at 365, Agiou Andreou, Efstathiou Court, 2nd Floor, Flat 201, 3035 Limassol, Cyprus.
Tradeco Limited is authorised and regulated by the Seychelles Financial Services Authority with licence number SD029.
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Our products are traded on margin and carry a high level of risk and it is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved.
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Thank you for visiting T4Trade
This website is not directed at UK residents and falls outside the European and MiFID II regulatory framework, as well as the rules, guidance and protections set out in the UK Financial Conduct Authority Handbook.
Please click below if you wish to continue to T4Trade anyway.
