Quant opinion: Surpassing the Fear of the Losing Money

I was recently asked in an interview what I would say to a trader or investor who is fearful.  That is, what would I say to help them overcome their fears and trade without fear. There are a fe…

 

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The best way to overcome fear is to automate trading imho… and to move all the physical infrastructure out of reach, for example to a leased server. And check it once a day only to make sure that everything still works.

 

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I think that’s a great idea. I firmly believe that looking at th he markets too much during the day for automated traders is highly destructive for most traders. Usually, the trader is tempted to deviate from his strategy as he see some chart pattern or news event that causes deviations. If you look at screen too much everyday, you eventually start seeing pink elephants.

By leased server, what exactly do you mean?

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Yes – you should have strict objective rules on when to enter, take profits, or stops for sure! Thanks for the comments gents!

I daytrade FX and I’m both fearless and respectful of the market. The only thing we “control” is our decision to enter a trade. After that, the market decides whether or not we succeed.

One policy I have is to stay OOTM (Out of the Market) unless I have at least 3 *compelling reasons* to enter a trade. Given those three, I have no fear of pulling the trigger. Staying in a trade requires the same thoughtfulness but whether I exit a trade for 3 pips or 130 pips, I count *any* profitable trade as a win.

 

http://revolutionarytrading.wordpress.com/2011/11/17/surpassing-the-fear-of-losing-money/

 

NOTE I now post my TRADING ALERTS into my personal FACEBOOK ACCOUNT and TWITTER. Don't worry as I don't post stupid cat videos or what I eat!