Fear Is the Portfolio Killer
Fear is costing you money. Let’s talk about how to manage it effectively. A long post👇
Fear
The hardest part of trading or investing isn’t reading charts, it’s managing your emotions. Fear, in particular, is a tough one
What Fear Looks Like:
- You planned to buy the dip but “changed your mind” when it came to it.
- You took profits too early, worried about roundtripping your gains.
- You closed a good trade for a loss, only to watch it pump to valhalla afterwards.
These all come from fear. So, how do we overcome it?
Progressive Desensitization
A powerful way to manage fear is through Progressive Desensitization. This means gradually increasing your risk over time as you get more comfortable.
Humans naturally adapt to their situation, including emotional stress. By trading slightly above your comfort level, you’ll build tolerance and confidence.
An Anecdote
When I started trading at 16, I had a couple of hundred bucks to my name. Losing even $10 sucked.
But as my skills and account grew, $10 became a rounding error. Now, that number is in the multiple thousands, and even then, it’s pretty manageable.
The pain of losing money never fully disappears, but it fades with time and experience. With practice you'll get comfortable.
How to Apply It
If you feel fear when trades go against you or don’t immediately move in your favor, lower your risk.
Then keep lowering it until losing doesn’t bother you much. Once you find that level, set your risk slightly higher.
It should sting a little if it stops out, but not ruin your day.
Everyone’s number is different.
The key is to push your comfort zone just enough to grow but not so much that fear takes over. Over time, increase your risk gradually as you adapt.
Fear is natural, but it shouldn’t control you or your trading. Put some time in, don’t rush it, and watch that fear dissipate.
p.s. Yes, the title is a Dune reference and Yes, you're right you should follow me.