Resistance has no strength of its own. Every ounce of juice it possesses comes from us. We feed it with power by our fear of it. – Steven Pressfield
Most aspiring traders can relate to the concept of fear as it is commonly discussed as a portion of “fear and greed.” These emotions are what drive irrational markets up and down. Bubbles are created by excessive greed. Crashes happen when fear causes everyone to panic at the same time.
Pressfield looks at fear from a slightly different perspective. He sees fear as the fuel for the Resistance. Not only are our fears handicapping our trading, they are also fueling our resistance to doing the necessary tasks to achieve trading success. Fear is a double-edged sword.
The only way to master the Resistance is to control our fear. Interestingly, that level of emotional control is also essential in successful trading.
There are many types of fear that can sabotage our trading and fuel the Resistance. We might fear being wrong on a certain trade. We might fear getting caught in a drawdown. We might fear the idea of failure, or we might even fear the idea of success.
For me, control over fear comes from rigorous backtesting that demonstrates a strategy’s track record. For you, control over fear might mean your own level of experience. It might also be achieved by strictly following guidelines set forth by a mentor or teacher.
Just like Resistance, fear will come at each of us in a different way. The best way to defend against this is to recognize that it will happen and have a plan to handle it. How is fear likely to attack your trading? What is your plan to control it?