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How To Overcome Your Fear When Trading 

Last Updated: March 21, 2022

By Rayner Teo


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In today’s episode, you’ll discover 5 common fears of trading and how you can overcome them.

So listen to it in now…


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Hey, hey what’s up my friend? In today’s episode, I want to talk about how to overcome your fears in trading.

Because here’s the thing, I know you have fears in trading like, “What if I clicked the wrong button and I blow up my entire trading account?”

Now, I’m not sure if you have that thought before. But that actually occurred to me in my earlier years of trading. So today, I want to share with you some of the common fears in trading and how you can overcome them.

But before we get started, I just want to credit Mark Douglas because he came up with something called the 4 Fears of Trading. I took that concept and tweaked it.

So in today’s episode, I’ll be sharing the 5 fears of trading and how you can overcome them.

1. The fear of the unknown

“Hey Rayner, what if I put on a trade and I lose everything? What if I lose all my money? And what if I put on a trade and a piece of news comes up and I end up wiping out my entire trading account?”

These are the fear of the unknown. You have no idea what you’re getting involved with. You simply have the fear of losing money for nothing and you don’t want that to happen.

To overcome the fear of the unknown, you have to expand your knowledge. It’s just like driving a car. If you take someone who has zero driving experience and you put him in a car, then that person will be a road hazard.

He will be afraid of everything and anything because he doesn’t know what he’s getting involved with. Where is the accelerator? Where is the brake? What is the steering wheel?

Those are the fear of the unknown because he doesn’t know anything. The way to overcome that fear is to gain knowledge, gain the relevant skills and expertise. It’s the same for trading.

You must expand your knowledge, read books, take up courses, listen to podcasts, listen to the TradingwithRayner show, expand your knowledge. And once you have acquired knowledge, once you’ve upgraded your skillset, then the fear of the unknown is minimized.

You won’t know everything out there but you will know enough so that you’re not a hazard to others, you’re not a hazard to yourself.

If you’re suffering from the fear of the unknown, then go and expand your knowledge.

2. The fear of losing

“Hey Rayner, I’ve no idea why every time I put on a trade my losses are always larger than my winners. Why are my losses always larger than my winners? What’s going on?”

This is the fear of losing. You’re afraid of losses because it hurts your trading account, you lose 50%, 60% of your trading account and even blowing multiple accounts.

The way to overcome the fear of losing, or rather, to manage your losses is very simple. It’s all simple math – it’s all about risk management and position sizing.

I can’t go into full details in this short episode, but if you really want to learn it, just go down to my website search for risk management, and I’ve got articles and videos dedicated to helping you manage your risk and do proper position sizing.

This means that every time you put on a trade, even if that trade goes against you, even if that trade hits your stop loss, your loss will be contained and it’ll not be more than 1% of your trading account.

If that’s something that interests you, then just search my website for risk management. You’ll find the resource to assist you with that. By practising sound risk management, that’s how you can overcome the fear of losing.

3. The fear of being wrong

I get it, I hate losing as well, losing sucks. Nobody likes losing. We’re brought up since young in an environment where you must be correct. Because only when you’re correct, then you’ll get praised, appreciated and stuff like that.

I don’t like that teaching because it trains kids to be perfect, to not make mistakes and not to be wrong. And this is bad not just in life, but when it comes to trading, it’s a disaster.

Because in trading, we’re dealing with probabilities. Let’s say every time you toss a coin, you get $2 when it comes up heads, but you lose $1 when it comes up tails.

Clearly, when tails come up, you lose $1 each time and you’ll hate being wrong. But if you learn to look at this in the grand scheme of things, you’ll realize that this is all probabilities. This is all about the law of large number.

Nothing is certain, trading is all about probabilities, never certainty. Just like tossing the coin. It’s all about probabilities never certainty. Opportunities out there in life and the markets are all about probabilities, never certainty.

And you must embrace probability, and that even if all the stars align, you can still be wrong. That’s trading. That’s life. So for the fear of being wrong, I get it, it sucks, but you must embrace it because if you can’t embrace it, it’s going to be very difficult to trade well.

And another tip that I have for you is that if you hate being wrong, if you hate losing, there are ways around it in trading. One way to go about it is to adopt trading systems with a higher win rate.

here’s the thing, not all trading systems are created equal. For example, a trend following system wins about 40% of the time. But the reason why trend followers make money, in the long run, is because their winners are larger than their losers.

For every $1 that they lose, they make $2 in return on average. So even with a 40% win rate, trend followers can still be profitable in the long run. And of course, that’s not the only way to make money.

Mean reversion traders who trade mean reversion in the stock market are on the opposite end of the spectrum. They have a higher win-rate, usually a 70% win-rate on average. And this is really for those of you who hate being wrong.

You can consider trading mean reversion trading systems in a stock market. One example I have is the Pullback Stock Trading System. Again, you can just put the link below or go to my website learn more about it.

These are trading systems with a higher win rate. And of course, it’s not I know all perfect with higher win-rate trading systems. The downside is that your average gain-to-loss is lower.

Let’s say for every $1 you lose, your return might be 70 cents or 80 cents, meaning your losses are larger than your winners.

But the reason why this worked out mathematically in the long run, is because of your high win-rate. So if you’re someone who hates losing, then maybe trading systems with a higher win-rate might make sense for you.

This is how you overcome the fear of being wrong, by embracing probabilities and adopting systems with higher win-rate.


4. The fear of missing out

“Rayner, I missed the bull market, what now?”

Missing out on trading opportunities is just part and parcel of trading. You’re not able to catch every single move out there in the market, but you can definitely minimize that from happening.

I have 2 tips to share with you.

Tip #1: Systemize your trading approach

If you can adopt a quantitative trading approach in your trading, that’s better because it can help you scan the market universe to make sure that you don’t miss out any trading opportunity. This is more towards quantitative trading systems trading.

Tip #2: Set alerts

For discretionary traders, another way out is to set alerts for your trading. For example, Trading View allows you to set alerts so that whenever the price comes to a certain level, you can be notified of it via SMS or email, etc.

This is how you can overcome the fear of missing out.

And finally…

5. The fear of giving back profits

“I’m up $500 but the market reverses, takes all my profits, and I’m down a negative $100 at the end of the day.” Fear of giving back profits.

One thing to share about this is that giving back profits depends on your trading methodology.

For example, if you’re a trend follower, your goal is to ride trends in the market then you have to be comfortable giving back open profits because that’s the only way you will ride a trend.

Usually, a trend doesn’t go up in one straight line, it goes up, retraces, goes up, retraces, goes up, retraces. How you can ride trends is to use a trailing stop loss.

Here’s the kicker, you’ll never know if the market is going to make a retracement or a full-blown reversal. You’ll never know, and that’s why you have a trailing stop loss in place.

And by not knowing whether the market is going to make a full-blown reversal or just a pullback, you have to accept the fact that sometimes the market might hit your trailing stop loss, and then reverse back in your favour.

This means that you might get stopped out of your trade prematurely, and there will be times when the market hits your trailing stop loss and you’re glad you got out at a trailing stop loss because the market ends up collapsing down lower.

Here’s the thing, no matter which scenario occurs for the market, it will hit your trailing stop loss. And when it hits your trailing stop loss, you have to give back some open profits. That’s the nature of trend following, that’s the fact of riding trends, you have to be willing to give back open profits if you want to ride trends.

If you have the fear of giving back open profits and you don’t like this approach then don’t go with trend following if that isn’t for you.

You might want to consider a swing trading approach where you look to capture swings in the market. For example, if you buy at support, you can look to sell at resistance, capturing that one swing or that one move. That’s it.

With such a trading methodology, I wouldn’t say you can avoid giving back open profits altogether, but it’s minimized compared to someone adopting a trend following approach.

If you hate giving back open profits, consider going with a swing trading approach to capture one swing.

Here’s a quick recap…

  1. Fear of the unknown – overcome by expanding your knowledge
  2. Fear of losing – overcome by learning risk management
  3. Fear of being wrong – embrace probabilities and adopt systems with higher win-rate
  4. Fear of missing out – adopt a quantitative approach to scan the markets or set trade alerts if you’re a discretionary trader
  5. Fear of giving back profits – adopt a swing trading approach to minimize that from happening

With that said, I wish you good luck and good trading. I’ll talk to you soon.


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  • Mr rayner thank you so much,you always delivered answer to my problems like you’re a prophet but I’m not surprised u might’ve pass this phase too
    God bless u

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