Fear of Trading

“I freeze every time I look at the screen. I get seized up with fear!” She said to me. I was afraid she was going to cry.

“I really want to trade. I really want to make money. I hate not having my money make money for me. But I can’t.”

She was smart so that wasn’t stopping her from making a fortune in stocks. She was frozen in fear.

What are you afraid of, I asked her.

“I’m afraid of losing money,” She said.

“Really? How much do you think you will lose if you do a trade?”

She thought for a minute, “I think my worst loss would be about $1000.”

Would you be fearful if you loss was only $10?

“Of course not! That would be silly!” and she giggled.

How about $100?

“No, that would be OK.”

So what you are telling me is that losing $100 doesn’t freak you out but losing $1000 does. Correct?


So cut your risk to just $100. You don’t have to risk $1000 on trades, and, if it freaks you out to lose that much then you should reduce your risk until you are comfortable.

She took the advice and became a successful investor. She slowly increased her risk over time.

Fear is one of the most critical problems that traders face. Fear of losing money.

I first learned this principle back in the 1970’s. The idea was that you were so nervous and anxious about a  position that you had that you couldn’t sleep. The words of wisdom I heard were, “sell down to the sleeping point.” In other words, if you can’t sleep, make your position so small that you can sleep at night.

I’ve been sleeping like a baby ever since…

Fear is such a big problem that I recently put together an amazing course on the Psychology of Massive Wealth. I reveal two different methods to conquer fear. Not only fear of trading but fear of anything!

Learn more about the course here.

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