Editor's Note: Dr. Doug Hirschhorn is among the premier peak performance coaches on Wall Street and holds a PhD in Psychology, with a specialization in Sport Psychology. A regular contributor to CNBC, he currently hosts a weekly video blog for CNBC. Dr. Doug is the author of 8 Ways to Great: Peak Performance On The Job and In Your Life and co-author of The Trading Athlete.
Why are traders so scared to trade?
The number-one reason is they have a fear of re-injury. I devoted an entire chapter in my book, The Trading Athlete, to this very concept.
Traders can often grow so afraid of getting hurt again -- especially given the wild swings we've seen in this market.This is very similar to when athletes get injured; even after they're physically healthy again, they're afraid to get back in the game because they don’t want to go through the pain again. Several popular movies have shown this phenomena in action (see Top Gun or Days of Thunder).
If you find yourself suffering from a fear of re-injury, here's what you can do to get past it.
1. Go small in your first few trades.
This helps you rebuild confidence. In baseball, when a hitter is in a slump, the best way for him/her to get out of it is just to bunt the ball a few times; put the bat on the ball. Traders should do the same: Keep the process simple until you get some momentum.
2. Think in terms of probabilities.
Ask yourself, "What are the odds of a once-in-a-lifetime event happening twice in my lifetime?" Of course it's possible -- anything is -- but is it probable? No. And successful investors bet on that.
3. Live in the present.
The past is the past, so leave it there. Avoid operating out of fear, and live in the here and now.
4. Keep life in perspective.
People place too much value on their investments. They correlate investments with their self-esteem when what they should do is keep them in perspective. It's only the market and it's only money. Both are important, but pale in comparison to your health and your life.
Author: Minyanville Staff
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