12.14What is fear in trading?
1What is it?
Fear shows up as panic selling in falls, cutting winners too early, or freezing and not following your plan.
2Why does it exist?
Fear makes people sell good investments at the bottom, locking in losses.
3Practical use
Write your plan when calm; follow it when emotional. For long-term investments, remember why you bought and whether the business has really changed.
4Quick revision
- Panic selling, cutting winners early.
- Plan when calm.
- Check the business, not just the price.
5Knowledge check
Q1. Common fear mistake in a crash?Show answer
Panic selling quality investments at the bottom.
Q2. How does a written plan help?Show answer
It replaces emotional decisions with pre-made ones.
Q3. What to check before selling in a fall?Show answer
Whether the business itself has changed.