Mark Espy submits:
Fear is defined as a feeling of agitation and anxiety caused by the presence or imminence of danger. Fear can be exacerbated by being confronted with an unknown outcome. When we are unsure of the outcome of a particular situation, fear can take control of our emotions and lead to hasty decisions. When the unknown is replaced with the known, fear is eliminated and clear, precise thinking prevails.
Several years ago, I accompanied a friend of mine who operated a White Water rafting company out of Flagstaff, Arizona on a trip on the Colorado River through the Grand Canyon. I was very excited about the adventure and after a brief orientation, we put into the Colorado for a three day trip through the canyon.
I was raised on the ocean in Southern California and grew up body surfing and was used to the water and respected its awesome power so I was both excited but somewhat fearful. In the beginning, our trip was mostly a float but soon we approached our first set of rapids and the roar of the thunderous water was deafening and I could only imagine the picture of being crushed against the rocks and drowning. My heart was pounding and adrenaline surged through my body as my friend turned to me and said “We’re going to scout the rapid” as we moved the raft over to the riverbank.
I have to admit, I was relieved to know that I was going to be given a chance to see what the challenge was ahead of us instead of blindly going over the falls. As we walked along the edge of the river, my friend was able to determine the danger points and our plan to safely negotiate the Big Water.
We re-entered the river and took the raft skillfully through the treacherous rapid just as we had planned. It was exhilarating and I was able to execute my job to make it through and emerge on the other side in the calm eddies that followed the rush of water over boulders a large as houses.
So it is with trading. Fear can prevent you from entering trades as well as shaking you out of trades for fear of losing your portfolio. The anecdote for fear in trading is “scouting the trade” ahead of time and knowing how you will successfully and safely negotiate the market. You must know your destination and if you are detoured by the trade, you must know your contingency exit. With knowledge and a plan, fear fades away because you have removed the unknown and replaced it with known outcomes. The trade now becomes merely a function of executing the plan which has been outlined well in advance. Our methodology at www.markettamer.com gives you this skill. The knowledge of how to trade without fear can last a lifetime and allow you to achieve consistent success in the markets.
Fear can destroy your career as a trader if you approach the trade without “scouting the trade”. Just as my friend “scouted the rapid” and planned our path through the roaring rapids, so can you do the same with your trading.
