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How does one deal with FOE (Fear of Entry)?

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Seattle, Washington
Trading Experience: Intermediate
Platform: Sierra Chart/SC Data
Broker/Data: Interactive Brokers
Favorite Futures: ES
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Posts: 55 since Jan 2012
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johny1971 View Post
@Gedman - I am taking in what you wrote and it is helpful. I am a little stuck on this last bit. I am asking because inner dialogue is essential to managing emotions and I want to be sure I fully understand your thought. If stops are not to be associated with "losing" or being a "loser", what then would the replacement words be. As typing this, I considered the word "winner", but that seems vague and out of context to what you wrote about, i.e. it seems best to have inner dialogue that is actionable and, so, it gets results. I totally agree that stops are prudent and just the way business is conducted, but my feelings aren't seeming to embrace this as well unless I communicate it to them differently.

Thanks and, btw, your process seems familiar - identifying the issue and taking phantom trades in a live environment.

If imprudent stops are used, or no stops at all, a trader may experience large losses, margin calls, or even a catastrophic loss. By using prudent stops (mine run in the 1.5 to 3 point range, depending on circumstances, with most around 2 points) a trader has a safety net, protection, the freedom to put on a position with a certainty that the trade will not harm him financially.

Perhaps another way to look at it would be to consider where we would be if we could not attach stops to our orders, but rather had to manually close out trades when they don't perform as expected. In this scenario we would face all kinds of (serious) risks that we do not have to even think about now, simply because we can and do place stops with our entry orders. From this perspective stops may legitimately be seen as one of our most important trading tools.

Not sure any of these will click, but perhaps something along the line of "safety", "protection", "capital preservation", "risk avoidance" or "risk limitation" and even "freedom". We have the freedom to put trades on at will because we are able to limit our risks to a non-painful level by using prudent stops.

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