Josh, the first thing I want to say is that it’s fantastic that you’re immersing yourself in solid, realistic trading books such as Mike’s two books. It’s also impressive that you are focusing on developing yourself as a trader and willing to invest in yourself and recognize the time required to do this.

I’ve seen many traders try things like visualization and positive self talk to address the fear of entering into a trade and holding onto a trade. But very often such efforts are not enough, and there is a reason for this.

It may be helpful for you to consider what I call the risk continuum—with one end being extreme risk aversion and the other end being extreme risk seeking. Obviously, you’re at the risk aversion end. The goal is to get you to move further out towards the middle of the continuum.

The first thing I want you to understand is that you don’t necessarily have to “get over the fear” to move out further on the risk continuum. I know many very successful and large traders who have similar fears. The difference is they are able to tolerate the discomfort that comes with these fears and are better able to control their actions and act in their best interest.

By extension, the second thing to understand is that it is not the fear itself that is the problem—we all have fears. The ability to tolerate the discomfort surrounding the fear is what allows us to control our actions, to do what we “know” we are supposed to do. In other words, how we respond to the various forms of discomfort that come with trading defines us as a trader. It’s been my experience, as a trader myself, and working one-on-one with traders who range from unsuccessful to some of the very best in the world, that one of the more effective ways of learning to tolerate the discomfort of fear is understanding the psychological roots of the fear. Let me explain.

Although I don’t know much about your particular situation, it does sound like you are highly focused and motivated, and I’m going to assume that you have a trading plan or method that you believe would be profitable if you followed it. If so, this is evidence that behavioral change will most likely not come from further intellectual endeavors such as positive self talk or promises to do better next time, or even sim trading. The reason? Our decisions and actions in trading are not simply an extension of our intellect. Our actions and decisions also require a feeling of confidence. Although logic may drive our thinking, emotions provide the fuel for action, and trading is a performance endeavor that requires action, not just thinking. So the solution to your situation lies in working with your emotions.

When we understand that emotions are part of being perfectly normal, and when we understand the unique personal reasons for our particular emotions, it allows us to begin to understand the reasons for the intensity involved in the fear. This represents one of the first and most important steps in increasing tolerance of the discomfort surrounding the fear. I have developed a course, available on my Web site, that is designed to address exactly what you are experiencing.