New Yearly & Lifetime Pricing Options!

My Biggest Fear As a Trader: Being Wrong

fear May 26, 2020
You’ve heard me say before.. Fear is the enemy of success.
When it comes to trading, that couldn’t be any more true..
I went through a bit of a transition a couple years ago. I had to take a deep look inside and ask myself some pretty hard questions.
When it came to Trading, I wanted to figure out why I’m so likely to hesitate on trade entries, to move my stop-loss, or to take my profits too early.
Of course, the answer is simple: fear.
But.. fear of what?
To be 100% honest, I’ve never been afraid of losing money. I’ve always had the mindset that whatever amount of money I lost, could always be replaced.
So what was I afraid of? Being wrong.
I realized that I wasn’t trading to make money, I was trading to be right. I was out to prove something, and anytime I lost a trade it was proof that I was “wrong.”
No one wants to be wrong. But some people hate being wrong more than they even like being right. It might seem crazy, but I was even scared to put on trades while using a trading simulator. Why would I possible be afraid of putting on those trades? Because I did not want to be wrong. 
There are definitely instances from my past where being wrong was punished strongly enough that it still carries through to my psyche today. I grew up on a farm, and on most farms you learn by doing. That includes everything from driving trucks, to driving tractors, to planting crops, herding cattle, and about a million other things. The problem is that many of those situations do not allow for mistakes. Can't drive a stick-shift well enough to get this semi up a hill full of grain with people behind you on the highway? You're screwed. Plant 500 acres of corn at the wrong depth or spacing? Might as well move away. Can you make it through the wet spot in that field? Either you can, or we're gonna have to call a $1000 tow truck. Not to go any further into my childhood, but if you made the wrong call on any of those situations, you were not only wrong, you're an idiot. Of course every 10 year old knows how to drive a grain truck. It's in your blood, right?
My exercise for you:
Find out what emotions you have tied to being “wrong.”
Figure out what part of your past lead to you hating to be wrong, wanting to prove something, or always wanting to be right.
Maybe it was your parents, your siblings, friends from school, a spouse, or it’s just an innate part of your personality.
Ask yourself, are those past emotions worthy of being attached to my endeavors in trading? Is there anything I can do to leave those feelings behind, or make peace with them?
When it comes to trading, this is why I recommend a systematic approach as a beginning trader. By that I mean, find a strategy that has an easily defined entry, stop loss, and profit target. Something that can be traded repetitively without emotions causing hesitation, FOMO, or negative reactions to bad trades.
In choosing that strategy, choose the one that fits your personality the best. Don’t try to force someone else’s personality into yours. There are an unlimited amount of strategies that can be traded in the market. Find the one that works for you. The less friction between your mind and the strategy, the better. Choosing a strategy that does not fit your natural capacity for risk will lead to you jumping out early more times than you can imagine. 
Practice and back-test that strategy until you can’t stand to do it anymore. Use a trading simulator if necessary. If this is the start of a lifelong career, an extra month in the sim will only help.
Once you settled on the strategy, keep this in mind. The only potential pain point from then on would be the strategy you chose. You will no longer care about loses from trades, or wins from trades. Those are just numbers in your statistical sample size. Once you've accepted that there are no perfect trades, you will stop feeling "wrong" about the choice that came before a whipsaw loss. 
From that point on, picking a bad trade will not make you “wrong.” Because it’s what the strategy said to trade- not you. Did you follow the strategy? Then you were right, regardless of the outcome. That's a freeing feeling, and it's great for those that fear "being wrong." 
Develop full trust in the strategy, and the negative emotions that previously drove your past trading decisions will be gone.

50% Complete

We'll Send You Our "How To Day Trade" Webinar