Big account trading can be intimidating. Learn how to overcome fear, minimize risks, and trade with confidence using simple techniques
Big accounts trading is thrilling, but at the same time, scary. Handling large sums of money is a daunting task that can fill the new trader with trepidation. However, you should not submit to fear. In truth, learning to master fear to be able to trade successfully with very large sums is a necessity and one of the first basic skills required of any trader.
In this article, we are going to explore how you can deal with your fear and mentally prepare yourself to trade when managing a big account.
Big Account Trading — Top Fears
Fear is not inherently bad; it exists in all of us — in the normal human psyche, including every trader. With big accounts, the bigger the financial risk, the greater the fear. Now, let’s delve into the common fears traders must combat:
Fear of Losing Money
The dreaded loss of money is one of the top fears when trading bigger accounts. As such, the need or pressure to protect your capital can be massive. This fear can increase as an algo trader, especially when a trader shifts from a demo account to a real account. You have real money on the line, and the fear of that can stop you from doing what you have to do.
Fear of Making Mistakes
Another front that poses a big threat is the fear that comes along with being wrong. Even after hours of chart analysis, the prospect of making a wrong decision can paralyze you. When you have a big account, the thought of making a wrong move is horrible.
Fear of Missing Out (FOMO)
Fear of Missing Out, or FOMO as it is often known, is the nemesis of even the most disciplined of traders. The urge to follow the crowd is many times too strong to handle, leading you to open a position in the market without the necessary research to do so. This fear can make your trade decisions emotional, often resulting in bigger losses.
FOMO (Fear of Missing Out) of Following Your Profit-Taking Tactics
A series of winning trades can quickly lead to the illusion that more gains are waiting to be claimed, just around the corner. But this fear of missing out on some profits will prevent you from taking profits when they are due. In other cases, staying too long in a winning position results in losing the cash as the market turns against you.
Best Ways to Control Fear When Trading Bigger Accounts
Fear is one of the biggest challenges any trader can face, and it’s an even bigger monster when it comes to trading big accounts. Here are some tips to help you conquer that fear and move forward with confidence in your trading:
Learn How to Trade Bigger Accounts
Knowledge is power. As you learn about the markets and various trading strategies, you will become more confident. Leverage the resources, training programs, and mentorship roles available online. Having an educational foundation can reduce the fear of trading large accounts because you will understand the dynamics.
Go Small and Grow Slowly
One of the best things you can do to conquer fear is to start small. Trade only small amounts to begin with — it is not worth rushing into big trades. You should start with a position size that you are comfortable with. Once you are confident and have some experience, you can then increase your size. This method will still help you develop your skills but will take away some of the pressure of losing large amounts of capital.
Create a Trading Plan and Follow It
When dealing with fear, a well-crafted trading plan is an effective antidote. Perform technical and fundamental analysis before placing trades. Identify how much risk you are willing to take, set stop losses, and set take-profit levels. After you have prepared your plan, have faith in it and implement it. Having a plan removes the emotion from trading, allowing you to make logical choices instead of fearful ones.
Keep a Trading Journal
Keeping a trading journal is an excellent method to track yourself and what you’ve learned. When you keep track of your trades, noting the reasons you make or take a position, and then reviewing the results, you will be able to identify trends in your behavior. It helps you recognize where fear may be guiding your decision-making and recalibrate your approaches. Keeping a journal also gives you confidence because you can look back on everything you’ve learned and how you’ve grown.
Use Risk Management Tools
Account Size -> Risk Management When Trading Big Accounts
By using stop-loss orders, you can save yourself from large losses. You can also put a cap on how much you are prepared to lose in your account when entering a trade. If you keep control of your risk, you can trade with less stress because you will know that you will never lose more than you can afford to lose.
Reason 1 — Fear is Something Ingrained in Human Nature, and Here’s Some Advice on Utilizing It to Your Benefit
Fear is a natural reaction, but it does not need to be detrimental. Fear is a tool — take advantage of it, do not fear it. The fear is there to preserve you from doing something foolish and getting yourself into real trouble. Accept that, and learn how to manage it rather than just avoiding it.
Conclusion
Trading large accounts is thrilling, but the constant possibility of losing money or making wrong moves lingers in the back of every trader’s mind. Nevertheless, if you learn, start small, create a robust strategy, and apply proper risk management, these fears can be overcome. Fear is just a hurdle you must conquer; and like any skill (and yes, trading is a skill), it can be practiced and refined. So, go out into the world of large account trading and flourish!
