4 Trading Fears that can Delay your Prop Trading Growth

Fear is a powerful human emotion. It can push us to safety, it can also push us to dismay. But its disadvantages seem to outweigh its benefits. It pushes us more to take uncalculated and miscalculated decisions/actions that can bring us down.

In forex prop trading, this is not different. When we operate from a place of fear, we make uninformed decisions; we rush into the wrong trades or run out when we’re not supposed to. As a result, we fail.

I know we cannot completely get rid of this emotion, but we can work on it, we can control it.

Today, we will address four kinds of fear that can hinder a prop trader’s growth, and what he can do to prevent these negative manifestations:

1. Fear of losing money

In this case, this group of prop traders have zero tolerance for loss. The idea of losing a trade scares them. They tend to believe that a trader must be 100% profitable (all the time) to be deemed successful. Any loss (no matter how little) is translated to mean a failed, unskilled or unprofessional trader.

These traders tend to use one bad result to judge and define their overall trading ability and skill. They struggle to accept that a trader must first embrace loss in order to win. They fail to acknowledge that no trading system can win 100% of the time.

Consequently, they end up NOT taking informed trading risks, miss great trading opportunities, and do not grow as they should.

You can overcome this fear by accepting loss as an integral part of the game, and by risking what you’re willing to lose.

2. Fear of being wrong

It is natural to always want to be right. But we must understand that we can’t always be. Here, prop traders who are adamant may be reluctant to enter a trade or may exit a trade prematurely just to avoid being wrong. This is mostly a result of past trading failures or previous bad experience(s).

To conquer this feeling, traders must focus more on small wins and view every trading outcome (win or loss) as an opportunity to learn.

3. FOMO

Under FOMO, traders become anxious and enter a perceived profitable trade based on social sentiment or opinions (with no careful examination or regard for their own well-calculated analysis).

When prop traders constantly follow the herd, they tend to lose self-confidence, develop poor decision making skills and become internally demotivated.

To protect oneself from FOMO, you must accept that there will always be other profitable opportunities, work within your trading plan and patiently wait for your setup.

4. Fear of leaving money on the table

Forex prop trading can be very lucrative, but the problem is usually how to spot the right setups or positions. In an attempt to capture the right setup or opportunity for profits, some prop traders may allow greed to kick in.

They may either waste a lot of their time searching for imaginary setups for unbelievable returns and ignore little to moderate potential returns.

FLMT may also push some traders to hold on to losing trades (expecting a retracement that will lead to their imaginary impressive profits) or they may overstay in an already winning trade (to win more).

To avoid FLMT, traders must make use of stop-loss and take-profit, and learn to walk away.

In conclusion, fear is an antagonist to your prop trading success. To minimize it’s impact, you must always have a trading plan, an effective risk management strategy and a realistic expectation in place before you enter a trade.