Fear has a funny way of popping up in the oddest places. It is something that we all face and fight from time to time. Most fear is unfounded, although it is very real for the person going through it. A common fear is the "fear of the unknown." A recent example was when my step-daughter started high school. It was a huge deal that she was both excited and worried about. What would it be like? Would the kids be decent? Would she be popular? One thing she failed to understand: Even if the experience was unknown and unique to her...it was not a unique experience. Millions of people become Freshmen every year.

When we enter into trading, it's very similar to her situation. We have high hopes, and high fears. Losing money is a sickening thought. Millions of other people have come and gone before us in the trading universe. Most people don't make it, but failure is not fatal. (Even if it can feel like it.) The truth is, we don't know how it's going to turn out for us. Again, a fear of the unknown. Trust me when I say this: All you can do is follow your trading plan. Believe it or not, trading is not difficult. It's the inner battle that is. (For most of us.)

When you put on a trade, fear can creep into your mind in many different ways. Trading is a matter of placing an order, and letting thousands of other people decide if your position makes money. Once you are in the market, you have no control of the outcome. Most people suddenly learn they like to be in control at this point. Truth is, you are not in control once you place that trade. The only thing you can control is when you get out of the market. One thing to remember is that you cannot control other people's emotions or actions. Plus, it is not a reflection on you. Some of the best people I know have nothing to do with trading. It does not quantify what kind of worth they have as people. It should not reflect on your self-worth either. Like I say all the time: Trading is supposed to add to the enjoyment of your life, not take away from it. Please learn and live that last line.

Fear also can paralyze you from trading. You suddenly feel like you don't know when to get into a position. This can be overly debilitating. Murphy's Law dictates that as soon as you do muster up the courage to get into the market, you will have a loss. This will only compound the damage. What you need to know is this: not all trades can be winners.

If I told you I have not had a losing trade in 5 years, would you believe me? Of course not. So why demand the same of yourself? Funny how that works out, huh? Also, if your financial adviser put you into a 401k that gave returns of 25% a year, would you be happy? Then why not allow yourself to be as human as the professionals? You cannot demand 600% a year from yourself if you cannot expect that out of the pros.

Let's say you gain 22% this year. I can promise you that some of those trades are going to be losers. It's alright, as it's just part of the cost of business. It brings up a huge remedy to fear in trading: Looking at the big picture. I recommend this because you will be able to live with a loser or two here and there when you realize that you are still up 8% for the year. (As an example.) If you get too focused on this one particular trade, it becomes too important to you. If it becomes too important to you - then the potential for it to worry you grows. Again, focus on the bigger picture. Slow and steady wins the race.

There are many commons fears in trading, but most of them can be traced back to ego. You are afraid of being wrong and paying for that honor. It's a bitter pill to swallow at times, if you let it be a big deal. There is a ton of possibilities when it comes to exploring the fear related to trading, and it is a subject I will cover quite often here at Forex Fantasies.

There is a raging debate in the trading world pitting Fundamental Traders vs. Technical Traders. There are merits to both types of trading, but one type shines above the other in my opinion. As you have probably guessed, it's Technical Analysis. I am not saying that it's impossible to be a successful Fundamental Trader, just more difficult.

Unless you want to become a part-time economist, you will find the Fundamental approach a little daunting to say the least. Basically, the "Fundie" takes various reports and buys or sells based on that. So if Europe has a strong set of numbers, and the US has low numbers, the "Fundie" will buy EUR/USD. Meanwhile, the "Techie" will use various types of technical analysis to decide entry and exit points of a trade.

The biggest problem I have with using only Fundamental Analysis is twofold: #1) It doesn't tell you when to get in or out of a trade, just the general direction. #2) It takes too much thought!

Unless you know what PPI, GDP, CPI, etc. all mean for an economy, and more importantly....what traders are worried about - there is nothing to base a trade on. Price doesn't always "Do what it's supposed to." Fundamental analysis matters, but it doesn't give you enough information. Think of it more as "background info."

Technical Analysis can give you very specific info. It also tells you the only thing that truly matter: Where the buyers and sellers are. Who cares why they are buying or selling? The only thing that matters is that they are. Remember, it's not the WHY that matters, it's the WHAT. In order to decide to buy on fundamentals alone, you are assuming that you understand what all the other traders are thinking. With technicals, you can see where the orders tend to appear. It's not 100% accurate, but if you take intelligent trades, it doesn't have to be. Remember, it's a matter of winning more than losing. That's all.