Fear couldn't be used to avoid loss because it's useless to use fear to avoid loss. If about possibility, it's possible to use fear to avoid loss but fear will make us inconfident to open position. If we are not confident to open position so we won't do anything. it will avoid loss because we didn't open position at all but we couldn't get profit too. So it's useless thing to do that. and Definitely we fear can help us to avoid loss in foreign exchange trade. One might not open a particular which will eventually end bad and due to fear will not open that trade. fear has helped to prevent loss. But i think the effect that fear will cause trading is more harmful than the loss it will help a trader to avoid.