Benjamin William156 Jenkins

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What is fear in trading and why is it harmful?

Fear manifests as hesitation to enter trades, closing winners too early, or avoiding markets after losses. Fear often stems from overexposure or lack of confidence in strategy. For example, a trader may cut profits short due to fear of reversal, damaging long-term expectancy. The solution is building confidence through backtesting, risk management, and smaller positions until discipline develops. Fear can protect traders from reckless decisions but becomes harmful when it paralyzes execution of solid plans.