Fear of pulling the trigger happens with every trader mostly in the initial period of his trading career. The fear is due to any one or combinations of reasons mentioned below :
1) Lack of proven and backtested method, so a trader is not confident to take a trade.
2) Inadequate capitalisation ....trader is afraid of pulling the trigger because he cannot afford to loose the amount he risks on a trade depending on his trade quantity and distance of his stoploss point from his entry.
3) Need to preserve the profits earned to pay the monthly bills. This again is a subset of inadequate capitalisation. So after earning small amount of profits trader fears taking a risk of loosing part of this profits because he needs this money for paying his bills.
4) Noise ,newsflow during the market ,contradictory opinions of "experts"..
5) Some previous large loss which the trader has had because of not having stoplosses etc. He has also seen some of his friends suffering greatt misery beacause of trading losses.This has bearing on the current trade and trader feels he should "wait and see what happens" instead of pulling the trigger and take a trade.
The first two reasons are most important reasons and if they are addresses well, the pulling the trigger whenever the method calls for is viewed as an opportunity to make money and the fear will subside to a large extent.
Smart_trade
1) Lack of proven and backtested method, so a trader is not confident to take a trade.
2) Inadequate capitalisation ....trader is afraid of pulling the trigger because he cannot afford to loose the amount he risks on a trade depending on his trade quantity and distance of his stoploss point from his entry.
3) Need to preserve the profits earned to pay the monthly bills. This again is a subset of inadequate capitalisation. So after earning small amount of profits trader fears taking a risk of loosing part of this profits because he needs this money for paying his bills.
4) Noise ,newsflow during the market ,contradictory opinions of "experts"..
5) Some previous large loss which the trader has had because of not having stoplosses etc. He has also seen some of his friends suffering greatt misery beacause of trading losses.This has bearing on the current trade and trader feels he should "wait and see what happens" instead of pulling the trigger and take a trade.
The first two reasons are most important reasons and if they are addresses well, the pulling the trigger whenever the method calls for is viewed as an opportunity to make money and the fear will subside to a large extent.
Smart_trade
My was out was day-trading Nifty Derivatives using 5min crossovers. More often than not the markets were trending down and counter-trending up but i was a net buyer for the majority of the period in the derivatives market. You can only imagine what happens next. Series of small gains and then 2 huge losses which not only wiped out my gains but also took out a chunk of my initial capital. All i could think was this crossover BS sucks. The truth being told what sucked was my lack of respect towards money and risk management. Anyways that's a different issue altogether.
After close to 6-8 months of studying VSA in and out i came back with strict Rules relating to risk and position sizing and a new asset to trade. But something had changed now. My paper trades (which now i think of as complete BS) were showing me a positive result consistently and my money management had improved so i should be making money right ? I was making massive amounts of money but on paper trades. For some reason i just could not pull the trigger. What i realized was that i'm not making money paper trading at the right edge as well , rather what i'm doing is taking these VSA principles and applying them on charts during hindsight analysis and then writing down my notional profits. Although hindsight analysis is very important it had become an obsession and it took me a while to get rid of this madness. But hindsight analysis proved one thing that there is an edge here which gives entries and exits prior to EMA can even think about crossing.
Came back after 3-4 months with a sense of clarity of thought and action and decide to trade to smallest lot sizes and not begin with 4-5 lots. Finally i had the confidence to pull the trigger but i was breaking even most of the times. Breaking even or losing money did not bother me , my biggest worry of not taking the trading was taken care of. Eventually everything else took care of itself.
Good Luck And Godspeed if any of you are going through this.
Cheers