His team have been one of the big surprises of the tournament, topping a group including neighbours England, dumping out one of the favourites Belgium in the quarter-finals and progressing to highs not seen enjoyed by the Welsh side since 1958.
"It's new territory. You will either be blinded by the lights and crawl back to where you came from, or have belief in yourself and stand up for your identity," Coleman told reporters at his side's training camp in Brittany on Sunday.
"You spend too much time thinking about what you don't want to happen rather than concentrating on what you want to happen. The message has been no fear, there's nothing to be afraid of.
"We screamed long and hard to be at a major tournament, and as soon as we got here the handcuffs were off. We're not restricted."
Coleman's biggest selection dilemma will be seeing how to replace influential midfielder Aaron Ramsey - who has scored one goal and contributed four assists - and centre back Ben Davies.
Both miss the match in Lyon through suspension, but Coleman was adamant that he had enough strength in depth, team togetherness and tactical ability to overcome the setback.
"They are two outstanding players, but it's not like we haven't been without them before," he said.
"Our biggest gripe before the tournament was that we couldn't get our strongest team on pitch for enough consecutive games.
"I have no worries about whoever steps in. I don't worry about these players because they know the drill, what's expected of them, the game plan that won't change."
Coleman sought to play down the hype on the potential rivalry between his talisman Gareth Bale, who has scored three goals at Euro 2016, and Portuguese captain Cristiano Ronaldo, who unlike his Real Madrid team mate has yet to really impress during the tournament.
Coleman said focusing too much on Ronaldo would be detrimental and a distraction to his team because Portugal's top scorer was capable of doing "something special" at any moment.
"But we have one in our team," he said, referring to Bale. "It balances itself out. We will just concentrate on what we’re good at. That's our identity, we're strong on that."
(Reporting By John Irish, editing by Ed Osmond)
