How to Conquer Your Fear of Day Trading

Few professions put you in a scenario where you actually LOSE money by showing up to work. Trading happens to be one of the few where that is a reality. A fear of day trading is nothing to feel ashamed of in the beginning.

However: Trading can offer freedom and scalability of income that no other profession can offer. In life, any worthwhile achievement doesn’t come without risk. While trading does come with risk, the reward more than makes up for it.

In order to become a successful trader, you have to reprogram your brain and your beliefs about losing money. You have to learn how to conquer the fear that comes with the risk in this profession.

Today we will show you how to conquer your fear of losing money, which holds back so many traders from being consistently profitable. Let’s start by defining the three types of trading fears that plague traders:

1. Fear of Losing Money

“Scared money doesn’t make money.” One of the biggest problems traders have is ACCEPTING the risk of trading. No trading strategy works 100% of the time, and losses are unavoidable, no matter what strategy you use. 

Many traders perceive losing money as a negative event. If you want to become consistently profitable trading stocks, you have to get comfortable losing money. You have to risk it to get the biscuit. Always define exactly how much you will risk BEFORE you enter a trade. Use this formula to calculate your position size and determine risk before every trade you take:

day trading fear

2. Fear of Being Wrong

Fear of being wrong leads to disastrous outcomes in trading. It makes you afraid to take risks and makes you take losing trades way too late. When you don’t cut a loser when you are supposed to, it because you are attached to being right. You hear the old saying “it’s not a loss until you sell”. Many chose to bag hold instead of admitting they are wrong!

The question you have to ask yourself: Do I want to be right, or do I want to make money? A major reason why so many traders fail is that they would rather be right.  

3. Fear of Missing Out 

FOMO is one of the most powerful emotions in investing. It has been afflicting humans for hundreds of years ever since speculation began hundreds of years ago. And still today it plagues even the most intelligent investors and causes rash decision making. You cannot let your fear of missing an opportunity cause you to behave rashly. If you know how to combat and overcome the fear of missing opportunity, you will put yourself in a great position to become a consistently profitable trader. 

Now that you understand the 3 types of fear that will appear in your trading, you will recognize when these emotions start to affect your trading. You will KNOW when these are affecting your decision-making, and take a step back before pushing any buttons. To combat these emotions, you have to learn to think like a casino:

Think Like a Casino

fear of losing money phobia

Every winning trader thinks like a casino. They don’t win 100% of the time on every blackjack hand, slots, or craps. But they have a statistical edge and know that in the long run (over a large enough sample size) they will always make money. That’s why a casino is a profitable business!

Your trading business needs to be the same way. You need to have a backtested system with a positive expectancy, which means it will make you money with a large enough sample size (learn more about how to build a trading system with our free trading kit here).

Casinos know that losing money on 1 hand of blackjack doesn’t mean their business is a failure. It is a cost of doing business. They know that in order to make money, they just need enough people in the casino to cancel out the people that actually make money.

Losing Money = Business Expense

Think of the money you risk on every trade as a necessary business expense. A grocery store has to buy food in order to sell it and make a profit. The only way you can be in winning trades is by risking money. You have to risk it to get the biscuit! Once you accept this, losing money won’t create fear in you.

Once your trading setups appear, you should be EAGER to risk the money in order to find out if it will be a winner. You know that putting on this type of risk will make you money in the long run and that it is your duty to put on the risk in order to find out.

Study your trades and charts every day. You need to know the exact setups and scenarios you have an edge and know what to risk your hard earn money on. You need to train your brain to recognize and pounce on the trading opportunities you have an edge on. Use this process to find yourself a defined trading niche that you can dominate:

stock trading fear

Trade Money You Can Afford to Lose

Are you scared when you pay $1 for a pack of gum? Do you feel pain when you part with that $1? All of your fear about losing money stems from the quantity of money you are parting with, relative to your net worth. When you drop $1000 on a bottle of champagne at a club, it’s a very different set of emotions for most people.

Put this in the trading context. You need to be risking enough capital to make the time you put into the trade worthwhile, but not large enough that you become emotional with the parting of the capital you are risking.

When all of your net worth is being risked on one trade, I don’t see how you don’t become afraid of losing that money. Your lifestyle should not change because of the outcome of 1 trade. Most trades you should be risking a small portion of your trading account, ideally no more than 1% of the total account size.

We’ve seen a ton of our students actually make MORE money by risking less, because they are less fearful, and make better trading decisions as a result. When you remove emotional attachment to money, you take a HUGE step towards becoming a consistently profitable trader.


There are 3 simple ways to conquer your fear of losing money:

  1. Have a defined trading system with an edge
  2. Risk money you can afford to lose
  3. View the money you risk as a business expense

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Nick P Administrator