How to overcome the fear in trading!

If your fear stems from not having confidence in your system why not just perform a backtest?

No, fear has absolutely NO place in trading. What a lot of people do is confuse fear with vigilance which is what you are referring to, always staying awake, aware and alert of what is happening in the market and always ready to take prompt action in face of any changes in the market. That's NOT fear; that's vigilance and diligence.

The fear that this thread is discussing on how to overcome is the actual fear of pulling the trigger to place the trade when a signal is there, an opportunity has presented itself. You know it will be a good trade, the risk/reward ratio is good, it fits your analysis of the market and yet you second-guess yourself and get cold feet and not place the trade and then tell yourself a whole bunch of excuses to justify staying on the sideline only to watch moments later how the price take off in the direction as exactly how you predicted and the many times tremendous profit that you missed. This is the fear that this thread is talking about. This fear is NOT acceptable. We are TRADERS, we TRADE, NOT sideline-sitters.

This fear is overcomable. This fear stems from lack of confidence in your trading strategy/system. Why were you second-guessing yourself? Why were you scared of pulling the trigger? Because you are not sure whether your trading strategy/system will work or not. You are not confident that this trade will pull in the dough for you because you haven't been proven that your trading system/strategy works. How do you prove to yourself that your trading system/strategy works? Demo, demo, demo!!! (Unless you are Warren Buffet and you don't care if you blow couple of million $'s in real trading) If you see that in demo/backtest that's set up in EXACTLY the same trading condition as in your future live trading, and your trading system/strategy is PROVEN to be consistently profitable then WHY would you be scared to trade the same trading system when live? If you are still scared of trading when you have proven to yourself in demo that your trading system works then you are not a trader. You are not a risk-takers and that's perfectly fine. Not everybody is a risk-taker and you can still be successful just the same.

Exactly. If you do have a proven system and you still experience irrational fear it is likely due to holding of a belief that is charged with negative emotions.

In such cases, I would recommend reading the works of Dr. Van Tharp. I'll give you a brief summary of what he advises on this matter:
- Perform feeling-release exercises: sit on a park bench and try your hardest to feel the fear everyday until you no longer feel it
- Meditate and ask yourself which part was responsible for the fear (these inner parts may manifest as shadows of your personal beliefs)
- Negotiate with the part, ask it to leave you alone, or give it something to keep it busy

Know thyself. It sounds ridiculous I know but have you got an idea of how many things sound ridiculous that have the power to throw you on the next level?

Alex

I think the fear trade is linked to the fact that the only person aware of the risk. And this does not need to interfere. The market is very unpredictable, you have to be careful and cautious. Do not rush to conclusions. In this, I believe the fear helps. And only when there will be an adequate baggage of experience, he will be gone.

Get someone to hold a loaded gun at your head with instructions to pull the trigger if you bottle on a trade - it works believe me!