How to Trade Boom and Crash Without fear

If you are looking for how to trade Boom and Crash without fear, then this article is for you. Trading forex doesn’t mean you won’t lose, off-course losing is part of the process, but your win rate should be more than loses

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Trading the financial markets is one of the best career choices that anybody can venture into. In it holds a great deal of fortune and freedom; the two most precious gifts after life. However, there have been a lot of issues surrounding the success rate of many traders especially new intake (newbies) in the industry.

Issues such as market manipulations, fear of losing of money, difficulty in understanding the market, emotional drain, loss of self-confidence, accurate trade management, non-sustainable result even with the use of indicators, excess spending on training sessions with no compensatory result, loss of money through signal groups, lies from traders who promise 15% returns on investment per agreed period of trading but no payment, consistent blowing of accounts, and lastly, use of new and promising strategies from YouTube, Instagram and other social media handles with no sustainable result. Due to these factors, many folks tend to see the financial market/trading as a tech scam or an avenue of fraud.

To further heighten the fear, the 90 – 90 – 90 cliché which says that ninety percent of traders loose ninety percent of their equity within ninety days of trading seem to be a scary issue to handle when money is being lost consistently to Boom spikes and Crash drops.

Knowing all of this, one may wonder what it really takes to be a successful trader. And most importantly, what it takes a trader to trade the Boom and Crash without fear. If for any reason you have been a victim of any of the above-named FEARS, then this article is for you.

Trading the financial markets usually comes with risk: a factor that so many traders consider to be out of their control. This is because, trading may seem as a risk-full adventure whose probability of success is not always on the side of the trader. Since trading is a risky adventure, it naturally breeds fear in the minds of traders and this fear often influences trading decisions. In the light of this, fear becomes a very important subject to address as it comprises more than 45% of a traders emotional and psychological wellness.

Fear is real and the possibility of trading fear-free is almost impossible. This is because, trading involves essential parts of your existence: your body and mind. The body as in the use of your essential organs (the brain, eye, hands etc.) and the mind (your thoughts, will and emotions). Since fear is an inevitable emotion that humans feel, it becomes almost a non-negotiable factor to handle if a trader should place an open position. So, how can you trade boom and crash without fear?

The answer is by understanding what causes fear and how fear can be managed during trading. The following points will address how to trade without fear.

This is How to trade Boom and Crash without fear.

1. Mind preparation

Preparing one’s mind is one of the most overlooked ways to trade fear-proof. Mind preparation includes getting one’s mental and emotional state ready for the day’s ride. It helps you to prepare your emotions and to tell yourself what to do when trades go North or South.

Often times, it involves going through our trading plan and journey just to remind ourselves about what we should do or never do no matter the circumstance. It reminds us that we shouldn’t jump at every opportunity which the market presents. And of course, it helps in settling greed, fear and excitement (the three most dangerous emotions a trader should always walk away from). With mind preparation, a trader will always guide against under-trading or over-trading and also remain calm and at ease since he/she has already gotten oneself into a place of readiness.

Without mind preparation, a trader will definitely make mistakes that he/she may not know how to address early. Like every trader knows, there are trading times that some of our trading decisions will be challenged. In days/weeks like that, mind preparation helps in keeping sanity in place as well as cutting looses on time. It helps to prevent emotional hype, trading instability and poor trading decision as it unconsciously help traders to develop trading discipline.

2. The thought of losing money

The thought of losing money usually stem from the reality of real-life trading as distinct from experiences gathered during demo trading. Like I often say, there is what is called the myth of demo trading and the reality of real-life trading. Demo trading is a simulated kind of training in which every new trader undergoes for the purpose of pre-acquainting oneself with the real trading environment. Although it has the same physical features of a real trading environment, the trading psychology used in demo trading seems very different when compared with real time trading. This is because gaining trading experience with a demo account is very different from an experience gained with real money trading.

The myth here is that there are so many things we practice and do while demo trading that once we bring them into real time trading, we begin to see and bear consequences in which we never paid attention to. For example, a new trader may have open positions that runs into negative and not get bothered about losing the account. Unconsciously, he/she ignores drawbacks since a virtual money is involved. And peradventure such trades go back into profit, the trader assumes a trading confidence on a virtual platform; an experience that will fail him when this same practice is brought into real time trading with real money.

With a consequent loss of account/money, fear, panic, discouragement and a lot of other negative thoughts and emotion set in. For that reason, when the reality of trading with real money comes into our minds, we often face the inability to trade in a relaxed state and this panic causes us to make poor trading decisions; a reality that challenges us to either quit or find out what it takes to succeed.

3. Poor risk management

Risk management is a concept that many new traders do not understand or give attention to. To them, all that counts is a good trading strategy. However, risk management is a hidden trick that guarantees a trader’s longevity in the financial market(s). No matter how reliable or successfully proven a trading strategy is, once the concept of a good risk to reward ratio is violated, such strategy will not help a trader to grow consistently or gain mastery. In the game of trading, losses abound! When losses set in, it is very normal to see a trader take revenge trades or overleverages his account with either multiple-trading positions or with outrageous lot sizes.

In some cases where the result turns out in a blood bath (drawdowns), panic and fear set in. beyond this, the fear of closing those open positions in red and most importantly, fear of returning to nothing after building so much high expectations as regards the day’s trading makes traders either quit or believe that someone is monitoring their trading account. However, this is not true.

The real issues here is, losses will always abound! However, a risk management skill taken before a trade is placed serves as a guide as to how much a trader should give into as risk. Once, a risked amount of money has been decided in the mind of any trader (mind preparation), I believe that the issue of fearful trading will be settled. But, when the issue of risk is not determined beforehand, anything can toss a trader from a point of stability to panic. Therefore, get a good knowledge of risk management is imminent to advance any trading adventure.

4. Consistent losses

The end result of point 1, 2 and 3 mentioned above always lead to either a growth or loss of confidence. This could include, loss of trading confidence, self-doubt, fear of taking a trade, resultant anger and frustration steaming from untaken trades which end up following our predictions and consequent blaming of social media tutors. All of these things happen when we refuse to accept and handle the challenges that comes with trading. The real truth is that, trading is not an easy adventure.

But it is a worthwhile journey of risk and reward. Be it as it may, loss of self-confidence is something that has happened to almost every trader. But, once knowledge of how to become a profitable trader is gained (by following the points mentioned in this article), confidence can be rebuilt. Do not let losses wear you down. There is so much to live for and gain if only you will pay attention to and pay the pay the price of how one should trade. Hence, get knowledge and self/trading confidence will be back.

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Disclaimer

Deriv offers complex derivatives, such as options and contracts for difference (“CFDs”). These products may not be suitable for all clients, and trading them puts you at risk. Please make sure that you understand the following risks before trading Deriv products: a) you may lose some or all of the money you invest in the trade, b) if your trade involves currency conversion, exchange rates will affect your profit and loss. You should never trade with borrowed money or with money that you cannot afford to lose.