Desire and Fear in Trading

Desire and fear alternate in the minds of traders as they go through the day.  But let me ask you whether desire or fear dominates your thoughts and feelings as you trade?

For many traders the primary emotion is fear.  They fear loss: losing profits, losing money, losing equity and even their margin.  Some fear losing their touch, their feel for the market, their focus, their luck, the respect of their boss, colleagues, or mate, or worse, their own self esteem.

Other traders are flooded with the emotion of desire.  They look forward to what the day will produce.  They like the thrill of the chase.  They have a sense of unlimited potential and abundant opportunities for profit.  They anticipate improving their skills, intuition, and understanding as they go through the trading day and week.

Keep in mind that desire is not greed.  Greed is an inordinate wanting.  It is excessive desire and comes from a sense of scarcity, a feeling that there is not and will not be enough.  Desire is healthy: greed is unhealthy.

What you feel depends upon your mental focus.  Do you place your conscious and unconscious attention on the possibility of loss or the probability (hopefully) of gain?

What you hold in your conscious attention colors your reality and becomes the quality and fabric of your life and trading. In your life, do you look for what’s missing, or do you pay attention to what you have and can create?  Do you think about terrible things that have happened and could happen again, or do you think about wonderful experiences you’ve had and expect even better things ahead?  Trading is a microcosm of life.  What you do in life, you’ll do in trading.

You can through conscious volition change your focus from loss to gain.  You can imagine failure or success.  You can anticipate improving your skills and understanding, or you can worry about getting even worse.

We tend to develop in the direction of our attention, so this is not a light matter.  It’s crucial.  Fear loss: get loss.  Desire gain: find a way to create gain.

It’s true, of course, that trading is a balancing game.  We must balance the possibility of loss against the probability of profit.  We need to keep both in mind, because while we must reach for opportunity we cannot overly risk our capital.  The question is one of where you put the primary focus of your attention and intention.

We balance the size of the profit against the size of the loss.  Lots of small profits and a few giant losses and you’re doomed to failure.  Lots of small losses and some large and larger wins and you’re on the road to major success.

You can choose, and choose again, where to place your attention.  This effects your perceptions and your interpretations.  What you perceive and how you interpret that perception effects your conclusions.  Those thoughts underlie your emotions which in turn generate your actions.  Fear and desire determine the kind of trader you are.

Fear causes you to jump out of winning trades way too soon, causes you to cling to horrible losing trades, makes you freeze doing nothing when the moment of opportunity comes, and makes you chase those trades that have long since passed you by.

Desire enables you to learn and thoroughly test winning methods.  It enables you to trust those worthy methods and facilitate them in a timely way

Let me make it simple.  Focus on what you desire.  Reduce your fears to reasonable cautionary planned actions, and look away from what you fear to what you do really desire.  You want and choose to be a winning trader.