Why We Are Afraid to Lose & How to Transform This Fear

Have you ever failed to the pull the trigger, even though your ideal setup was right in front of you? What about feeling paralyzed to hit the buy/sell button after a big loss? Have you noticed how your mind tends to race right before you fire off a trade as you think about your last loss?

All of these debilitating experiences tend to follow our fears, particularly being afraid to lose. Ironically, our ‘being afraid to lose’ often times goes beyond the potential loss of money. In most cases it has to do with something beyond the pure dollars at risk. In many cases, it becomes one of the primary hurdles a trader faces and never overcomes.

This article will first go into the underlying reasons why we are afraid to lose. Then I will share a method how to transform this fear to enhance your trading performance.

Behind The Curtain
In reality, there are several ‘reasons’ why we experience being afraid to lose when we are trading. A few examples are;

a) Perhaps we have an unconscious fear of making a mistake and what that might bring (i.e. a parental punishment)
b) We fear the potential loss in money and our ability to make it back
c) Making another mistake will only confirm our suspicion that we cannot trade

I could probably spend an entire day listing dozens of reasons why we experience this fear. But behind the curtain of it all I find are two variables which remain constant;

1) The anticipation of what has yet to come
&
2) An unconscious or limiting belief that perceives the potential outcome as a threat, dangerous or painful

The first one is something the Buddha once said, that ‘Fear is the anticipation of what has yet to come‘. Imagine if we approached our next trade and had no anticipation of what was to come next. We just trusted our system and pulled the trigger, then let the system play itself out.

More than likely you’d experience a lot less emotions and the debilitating physical responses that tend to affect our thinking. Although many people get this idea ‘intellectually’, it is easier said than done. Often it takes years of practice, training and experience to have happen moreso than not.

As to the second one regarding ‘unconscious or limiting beliefs’, most of the time, we are not just trading the price action setups in front of us – we are also trading our thoughts and beliefs about money, our ability to make money, what our perception is of our P&L, our current trading skill, and more. In most trading situations, we are not just trading setups at key levels – we are trading our unconscious limiting beliefs + our motivations for why we are trading.

How To Transform These Fears
There are three things you can do help reduce and transform these fears. They are;

1) Expand Self-Awareness

2) Awareness Practices In The Moment

3) ERT to Remove Unconscious or Limiting Beliefs

Expanding Self-Awareness
The first step to expanding your self-awareness is to recognize how our thinking, emotions and perceptions in the moment affect our interpretations of things, particularly related to trading. When you do this, you begin to realize how these ‘perceptions’ of your trading will color your experiences and memories around trading. This can have an empowering or debilitating effect on your trading performance.

A trading journal also helps us to see how our trading behaviors often repeat, and thus help us to become aware of the mistakes we make frequently. This is to help keep us honest and in check about how we are really doing from day to day.

Awareness Practices in the Moment
One awareness practice that helps us in the moment is a silent meditation practice. I am not talking about a guided visualization, but a mindfulness practice designed to help us become aware of our mind, thoughts and mental activity in the moment. By sitting every day before you start trading, you can calm your mind and see how the traffic of thoughts can affect your trading.

If you think your mind is busy while you are just sitting trying to focus on your breath while little to nothing is going on – imagine what its like during trading?

Meditation and mindfulness practices shed a light on how our mind works and is working in the moment. By having a contextual experience of calm, clarity and focus, you can recognize when you are not calm, clear and focused.

Also, meditation and mindfulness practices help tremendously in expanding your self-awareness, so taking out two stones with one.

ERT to Remove Unconscious / Limiting Beliefs
Sometimes we have unconscious or limiting beliefs which interfere tremendously with our trading. If you find yourself repeating the same mistake without knowing why, in 99% of the cases, it has to do with an unconscious or limiting belief.

Our mind stores memories like a bunch of pictures stuffed in a shoebox, so your memories around money when you were a kid could be right next to your memories around trading. Activating memories of one can excite the other, and thus affect your trading performance in real time.

These often take the longest to uncover, transform and remove, and could take years of both meditation and awareness practices. One short cut to this process is ERT Training which helps you to discover and transform them quickly. We actually have an ERT Training program specifically built for trading. Many traders have already gone through the program and noticed tremendous changes in their trading.

One final note about doing the three above is they inevitably lead to greater market awareness and more profitable trading. This comes from seeing more of what’s going on in the markets finding clues others would not since you are less inhibited by your fears. Intuition, confidence and your learning curve all tend to increase heavily when you build self-awareness, expand your awareness in the moment and remove your limiting beliefs.