Conquering the Fear of Missing Out

 | Jun 30, 2013 | 10:30 AM EDT
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One of the main fears of trading is the fear of missing out. Oh, the regret we feel when a trade gets away from us! I've felt it many times, and so have you. The pain of not participating, in fact, can seem worse than that of getting punished on a bad trade. In options trading in particular, you can easily miss opportunities -- and you'll kick yourself all the way to chasing a trade, even when that's a bad idea.

We've all been there, but how do you avoid missing out? There are many key ways to dodge this fear and to participate in the winning side.

Have you been on a winning trade and cut it loose too early, either by booking a loss or cashing it in for just a small win? You may well have done your analysis and been prepared yourself for the trade, yet you might still have missed it for one reason or another. Were you worried that you might be wrong? The stories are endless, but the result is the same: Frustration mounts, and we start chasing after trades in an illogical and maniacal way, losing money as we go.

I chatted with subscriber who had achieved a great winning trade on Google (GOOG), and was puzzled about what to do next. But her apprehension soon fell away as she realized that she was in a great situation at that moment. She had a number of choices available -- among them ending with gains, or continuing on with that winning trade.

It's then that the choices became easy. True, nobody wants to be left behind. Yet you must remember that this game is about booking winners and profits when you have them. In options trading, the window of time is narrower than it is for a stock trader, who -- in most cases -- can roll through some volatility without risking total loss. But when you realize you have options, or choices, the playing field will open up to you.

In short, always allow yourself to continue moving in your trades, and never be afraid to lose. In options trading, losses are part of the game. You just don't want too book too many big ones.

So what can you do to extinguish the fear of missing out? Take partial profits, roll positions, buy protection and above all take some risk -- because that is how you get paid.

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