Confidence in the Face of Uncertainty
It is easy to lose confidence during uncertain times. No one wants to lose money, and when we perceive the markets are generally following a bearish trend with occasional rallies, it's natural to feel a little anxious and afraid. How can we cope? Although it may not relieve all anxiety, tried and true methods can help. You can acknowledge your fears, manage your risk, and accept your limitations.
You can't control the markets. Fear is a natural emotion. The best way to handle fear is to just admit you are afraid and let it go. It's all right to feel afraid. Rather than feel uneasy about fear, it's better to admit it. Face your fears, and figure out a rational way to address the market uncertainty that is behind your fear.
Another important way to conquer fear and face uncertainty with confidence is to manage your risk. By risking relatively small amounts of capital on any single trade, you will feel better. It's also wise to use protective stops and have clearly defined exit strategies. Putting less money on the line with each trade is an effective way to decrease fear of losing money, and increase a sense of mastery and control while coping with uncertainty. Similarly, it's important to trade with money you can afford to lose. If you trade with money that you badly need to pay basic living expenses, you will have a valid reason for feeling uneasy. It can be difficult to fool yourself. So don't bother trying. If you can't afford to lose your stake, build up your account balance and stand aside until you can calmly put a bet down without concerning yourself with the adverse consequences of a possible loss. Besides, under current market conditions, you won't be standing on the sidelines alone.
Perhaps the most important key to feeling a sense of confidence in the face of uncertainty is to know your personality. People differ in terms of how they deal with fear and uneasiness. Some people are easily frightened while others can stay calm under the most stressful of circumstances. It's important to know where you stand on the fear-tolerance continuum, and accept your limitations. If your tolerance for fear and chaos is low, it's going to be harder to gain control compared to others. For some, it may be necessary to adjust one's trading strategy. If one has difficulty trading in a fast-paced chaotic environment, for example, it may be necessary to make only long-term investments, where quick decisions are less urgent. Or when trading in the shorter term, it may be useful to use the automatic settings on trading software to exit, or place specific orders with a broker over the phone. Regardless of the strategy one uses, it's vital to gauge one's tolerance for uncertainty and take appropriate steps to compensate.
We may be trading under uncertain times, but we don't need to cower under the strain. We can take precautions and face market uncertainty with confidence.
You can't control the markets. Fear is a natural emotion. The best way to handle fear is to just admit you are afraid and let it go. It's all right to feel afraid. Rather than feel uneasy about fear, it's better to admit it. Face your fears, and figure out a rational way to address the market uncertainty that is behind your fear.
Another important way to conquer fear and face uncertainty with confidence is to manage your risk. By risking relatively small amounts of capital on any single trade, you will feel better. It's also wise to use protective stops and have clearly defined exit strategies. Putting less money on the line with each trade is an effective way to decrease fear of losing money, and increase a sense of mastery and control while coping with uncertainty. Similarly, it's important to trade with money you can afford to lose. If you trade with money that you badly need to pay basic living expenses, you will have a valid reason for feeling uneasy. It can be difficult to fool yourself. So don't bother trying. If you can't afford to lose your stake, build up your account balance and stand aside until you can calmly put a bet down without concerning yourself with the adverse consequences of a possible loss. Besides, under current market conditions, you won't be standing on the sidelines alone.
Perhaps the most important key to feeling a sense of confidence in the face of uncertainty is to know your personality. People differ in terms of how they deal with fear and uneasiness. Some people are easily frightened while others can stay calm under the most stressful of circumstances. It's important to know where you stand on the fear-tolerance continuum, and accept your limitations. If your tolerance for fear and chaos is low, it's going to be harder to gain control compared to others. For some, it may be necessary to adjust one's trading strategy. If one has difficulty trading in a fast-paced chaotic environment, for example, it may be necessary to make only long-term investments, where quick decisions are less urgent. Or when trading in the shorter term, it may be useful to use the automatic settings on trading software to exit, or place specific orders with a broker over the phone. Regardless of the strategy one uses, it's vital to gauge one's tolerance for uncertainty and take appropriate steps to compensate.
We may be trading under uncertain times, but we don't need to cower under the strain. We can take precautions and face market uncertainty with confidence.
posted by nomadhunter at 7:56 PM
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