In trading fear can be good or bad, if you let fear control you it is bad if you control fear it can cause you to have positive behaviors. Here are the proper uses of fear in trading.
GOOD FEAR
- Be afraid of losing more than 1% of your capital on any one trade.
- Be afraid of too big a position on a single trade.
- Be very afraid of trading before you do your homework.
- Fear should stop you from trading against the prevailing trend.
- Be afraid to short monster stocks in bull markets.
- Do not be afraid to let a winner run as far as it will go with a trailing stop.
- Do not be afraid to buy at all time highs or sell short at all time lows.
- Be afraid to let other traders influence your method.
- Be afraid to trade without a trading plan.
- Do not fear losing money, fear losing discipline.