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Trading Scared

This may be a topic in which we have discused before, but one I felt necessary to bring up. Trading Scared is defined as someone who personalizes each and every trade. They typically will book profits very quickly on a trade, and if the trade goes against them they will one do one of two things. They will either take the loss very quickly because they feel to much pain or they will hold the trade to long and the loss will become excessive because they do not want to take loss.

Traders who trade scared typically do so because they either do not have a trading plan and are just trading to trade or in many cases they can not afford to trade. What I mean by this is that they are not trading with “risk capital”, they are actually trading with money that they need ( ie. bills, mortgage, college, etc). If you are trading with money that you can not afford to lose, you are better off not trading at all, because ultimately you will lose it. To be a successful trader it is essential that you have a trading plan, but is equally important to be trading with risk capital.

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