You never know until you try
At an early age, I learned that there will always be a certain level of uncertainty in every thing that we do; This is simply a fact. There are certain outcomes that we expect to happen because of past experience but, we never really know. With that thought in mind, the level of uncertainty only rises when we do things that we have no experience with whatsoever, all we can do is a bit of research in an effort to clear a few things up.
Accept your risk
I’ve never actively done this but, accepting your risk is necessary, especially when doing something that you’ve never done before.(Of course if you’ve never done it before you would also have to find out what the risks are.) Accepting your risk knowing the risks that come along with what you’re doing and being okay with them; being okay with the loss that you could possibly lose, get hurt etc. (It’s not simply saying that you’re taking a risk)
Risk management is the most important part of trading. When making a trading plan it’s necessary to set a defined risk and accept that you possibly lose a certain amount of money. Setting a specific risk and accepting the fact that you could lose a certain number of dollars, keeps you from getting scared out of trades when things go a certain way; All you have to say is okay well the stock has hit my stop I must get out, or the stock hasn’t hit my stop so I stay in.
With that, you have to go with your move. You must be able to get past the fear of the unknown. (it’ always going to be there)
How to get past the fear of the unknown?
Understand that something will always be “unknown”
- The unknown is always going to be there, this is something that we can’t help. The key to getting past this fear, is embracing the unknown, accepting it’s presence.
Accept the risk
- Risk, like the unknown is always going to be there. We also must understand that we’re taking a risk and understand the details of the risk. For instance, when going long on a security that I’m trading, the risk that I take is that I lose a certain number of pre-defined dollars; meaning that I can set a stop loss and still not get filled at that stop loss or, something crazy could happen like I get caught in a down trending halt and the stock ends up gapping down.
See it as a learning experience
- I’ve learned that instead of always trying to be right (because I’m usually not going to be), I can see everything that I do as a learning experience. For instance, when I get caught in a halt, I can understand the behavior of the stock before it got halted. This, in turn helps me avoid stocks that are displaying similar behavior in the future.
Don’t be the reason that you don’t succeed. Risk is always going to be there, the key is understanding this fact and embracing it.