We’ve all been there. We make a couple of good trades and make profits. We get cocky… nothing can stop us now right? And BOOM! We lose it all in one trade. Instead of getting back on that horse, when we try to enter a new trade, fear overwhelms us and we’re reluctant.

Don’t let this fear prevent you from trading at all. For some of us, it’s in our nature to be the perfectionist, or the ‘I need to be the best at everything’. This is when we blame other people for our mistakes and project our negative emotions without acknowledging the real concern – that we’re afraid.

Consider this, you just got out of a losing trade. Lost hundreds, maybe even thousands of dollars. You’re so afraid of the consequences of trading that you don’t enter the next trade, which not only breaks even from the loss, but earns you a profit. Why miss out on something great?

There is no such thing as having a winning trade every time. No matter how experienced you are as a day trader, you will occasionally have those losing trades. It’s inevitable – that’s exactly why you can’t let the fear of day trading take over. Easier said than done, especially for new traders.

When I first started trading, I had many moments of doubt. Even considered quitting day trading all together. One week, I would make $85,000, the next I lost $20,000. It felt like I was gambling. Always looking for the newest successful strategy, instead of mastering a single strategy. You know, that’s what feeds the fire. Naturally, we are afraid of the unknown. It’s what causes the nervous pit in the stomach when we do something new. So why was I constantly trying new, uncertain strategies, putting my hard earned money on the line when I did have a system that worked well? It wasn’t until friends of mine asked me what my secret was on a certain trade that I knew I had something good going. Ergo, I decided to master it, rather than Googling the newest way to ‘get rich quick’ on the market.

But what happens win the fear gets to us?

Each trader experiences fear differently. Some get physically sick, some become depressed or start to panic, they feel insecure and look for guidance through external factors – the family members that tell you how dangerous and risky the stock market is… that you’re gambling your money away… do they trade? Most likely not. If you’ve ever been online on our Live Trading sessions, I’m sure you’ve heard Bob with his ‘Suicide Reports’. Unfortunately, it’s common for traders to resort to this from all the stress associated with trading. Don’t let it come to that. There are ways to deal with the stresses that come with the fear of losing money.

First things first, work on YOU. Meditate, play sports, travel, spend time with your loved ones, practice yoga! Get your mind clear so that you can disassociate yourself from the negative emotion that come to play with day trading. I always make it a point not to trade if my brain is psychically foggy as well, not just emotionally unwell. If I am sick, hopped up on different medications, I will not risk it. My money stays in my pocket until I am better. And please… get a good night sleep! It really does make a difference!

Secondly, acknowledge the fear and face it. Do not suppress it. You may feel insecure of your trading, but this is the time to psyche yourself back up. Obtain the confidence from within by thinking and speaking positive thoughts associated to your trading. Think of all the profitable trades you have had. There is truth to the saying, “Fake it ’till you make it.” Doing this will help you swallow those nerves and get back on the horse.

Another way of overcoming this fear of day trading is trading on paper. Granted, it may not give you the emotional stress that real trades provide, after all you’re not trading real money, but after a few good paper trades, you will have the confidence to get back in the game. Sometimes it’s more than necessary to step back from the real thing to clear your mind.

We all experience fear when it comes to our precious dollars, but it’s something that needs to be overcome before you can be a successful trader.

Hugh Grossman, Head Trader at Day Trade SPY.


Hugh Grossman is the founder and Head Trader at DayTradeSPY and uses his vast experience to teach his methods to make consistent daily gains trading SPY options. Join Hugh in his interactive Trading Room to see how he regularly pulls in the profits!

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