How to overcome fear in stock market

 All market timers, traders, and investors in every kind of market feel fear at some level. Turn on the news one day and hear that a steep, unexpected selloff is taking place and most of us will get a queasy feeling in our stomachs and mind as well.

But the key to successful, profitable market timing—in fact, in all trading—is in how we prepare ourselves to handle trading fears. How we prepare to deal with the risks inherent in trading

There are four major trading fears. We will discuss them here with our fact check

Fear of losing : 

It’s a scientific fact that people will do irrational things to avoid loss. And one of the biggest fears people hold to is the fear of losing money.

The fear of making losses tends to make investors hesitant to execute their strategy with regard to timing. This can often lead to the inability to take timely action with respect to new entries as well as exits. The focus should ideally be on minimizing losses, as this allows investors to stay in the game, both financially and psychologically. Investors must have the ability to bear losses. However, in the event that they cannot guard their capital against potential losses and choose to remain

FACT Check :  Trading is dealing with probabilities never certainties, risk management & money management is the key to your success in stock market

"If you can’t take a small loss, sooner or later you will take the mother of all losses" – Ed Seykota

Fear of missing out:

Fear of missing out or FOMO is a situation where a trader is afraid of missing out on a huge trading opportunity in the market. FOMO is a common issue in financial trading and can affect anyone — both new traders with retail trading accounts and professional traders working for big institutions can experience fear of missing out.

The fear of missing out can be characterized as greed, largely owing to the fact that investors are not acting based on a desire to own a stock, but with a view to be a part of the market’s upside momentum. This has proved to be very risky for investors who take positions when the uptrend is mature and nearing its end.

FACT Check : 

Even expert cannot catch all moves in the market. Depending on your trading approach, some market conditions will be favorable to you,  and some will not.

Fear of letting a profit become a loss:

There is no reason to fear a loss, but one major sin is allowing a profit to turn into a loss.  We've all done it and every one of us have regretted not pulling the trigger earlier.  Oh, why didn't I sell it yesterday when I had a gain?

Unfortunately, most investors and traders choose to adopt a stance that is in opposition to the principle “let your profits run and cut your losses short.” Instead, they opt for making quick profits, while letting their losses spin out of control. Very often, they tend to equate their net worth with their self worth, and opt for making a quick profit that makes them feel like winners.

FACT Check : A trader must have a trading plan which clearly defined entries and exits, instead of trading based on emotions.

Fear of not being right:

The desire to focus on being right rather than on making money is a function of the investor’s ego. To be successful, this tendency should be avoided at all costs. Investors should strive for excellence and financial gain over a sustained period of time, rather than focusing on the fact that each buy or sell order they give should be an accurate one

FACT Check : There is zero correlation between your winning % and your profitability. Likewise, there is zero correlation between your IQ and your success as a trader.

Checking the performance of investments very frequently increases the chances of receiving negative news in the short term. This is not likely to play a major role in the process of investors attaining their long-term goals. If they react irrationally to this kind of news, as humans tend to do, they can seriously damage their long-term plans or goals.