The 4Rs to Overcome the Fear of Losing

Fear Of LosingDo you have a well developed and profitable strategy? And you’ve back tested the strategy with sufficient sample size and it has rules that suits your personality? Yet, you’re still struggling to implement the rules on a consistent basis? Is that because of Fear?

If yes, then please read on.

Unfortunately, like me, one of my weaknesses is actually “FEAR” of Losing. And I’m constantly held back by the issues relating to Recency Bias, thus, struggling to take the next trade (which often turns out to be a winning trade). Yes, it’s sadly true. Like it or not, this is just part of being a normal Human Being and having emotions attached to us.

I’m one of ‘them’ who spends all my time (well, not all but majority of it) on finding the ultimate, the best and the perfect strategy. Worst still, I know and I preach to others that there’s no such thing as the ‘Holy Grail’. All strategies, if developed in the correct manner, will work… Period!

So today, we’re going to be talking about ways to overcome those fears.

If you’re like me and you’re constantly worried about losing (even after doing sufficient homework on identifying your Edge), then here’s something that might help:


The 4Rs to Overcome the Fear of Losing

  • Right State of Mind – You’re focusing way too much on the recent loser (or winner). You need to forget about the last trade and start with the Right State of Mind. If it helps, walk away, take a breather and start with a clear mind.
  • Random – Remember that the market is Random and each trade is independent of the other, you have no Crystal Ball to predict the future and, hence, anything can happen. If you can predict the future, well… I suppose you won’t be reading this article then.
  • Reward – Ask yourself, would you prefer to have lost 1% on your account or to have missed the opportunity of rewarding yourself 2% or more of Profit (assuming your Reward:Risk is 2 or more).
  • Revisit – Revisit your Edge, including your trading plan and statistical outcome of your strategy. This is a good reminder that the Edge would only work in your favour IF you apply the rules mechanically i.e. taking all trades whenever the rules are met. If not, you‘re only trading a random system and not your Edge.


Hope this helps.

Thank you for reading and happy trading!!


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