If fear is a powerful emotion, I believe that combining that with pride is an even more dangerous emotional condition to avoid while trading. This is the fear of humiliation, or in other words, pride. For many it is very difficult to admit being wrong. In the market, that tendency to never give up and to tough it out works against us. The market does not care about your perseverance and courage. Those qualities are not recognized as strengths in the market. In fact, they are actually weaknesses in trading.
Have you ever entered a trade where it goes your way at the start, but reverses at some point$%: You just let it ride for a few days, because it was going so well before. You might even suspend your stop loss because, after all, the stock went the right way at first, and you just cannot be wrong about this. The stock bounces back up a bit, and you are feeling vindicated. Then comes the day that the stock drops quickly, and you freeze up. You did not put in your stop order; you do not know what to do. But your overall concern is what others will think. You are embarrassed; you do not want to admit defeat. Eventually you either sell at a much lower level than your original stop was at or you are still holding onto that stock 'knowing' that it will come back at some point.
The fear of humiliation allows us to lie to ourselves. We make excuses for ourselves. We tell our friends that it was the market's fault that that trade went bad. But the market will never be what you want it to be, just because you want it to be. The market will act as it wants and you must accept that and deal with it. The market is not alive, it does not experience emotion and, most importantly, it is under no obligation to be fair.
A little instance:
The answer is to channel our emotions in a positive direction. Keep trying to learn more and become a better trader. Do not get upset over small losses when you hold to your stops. View stops as a cost of doing business. Learn from your mistakes, but do not continually look back on them and beat yourself up about them, but view them as bumps in the road on the way to becoming a successful trader. After any experience like this, move forward with the resolve to not make the same mistakes again.
Every great trader starts out with mistakes. If you can minimize the financial pain from these mistakes, and learn from them, you are on your way to becoming that great trader. Learn the warning signs of pride in your trading, and work to correct them.
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