Are you on a losing run and can’t seem to reclaim your trading mojo? Here are a few quick reminders to get your head back in the game.
In the realm of trading, losing streaks are prevalent. At some time, every trader has had a losing run. Even the most consistently profitable professionals go through slumps!
Anything can set you off on a downward spiral. It might start with a single large loss that wipes out all of your previous earnings, or it can start with a series of minor trades.
The recurring theme is that it not only destroys your trading mindset, but it also damages your account.
When a trader is on a losing run, pride might get in the way, and he or she will go to any length to regain the losses.
This might lead to vengeance trading, in which he or she insists that he or she is correct and the market is incorrect. Others end up “betting the farm” in the hopes of recouping all of their losses with a homerun deal, but this can have fatal consequences.
So, how can you break free from your funk?
WILSON WALTER, a trading psychologist, proposes having a deeper look at the following:
1. A breakdown of trade
Examine all of your trades to evaluate which setups are profitable and which aren’t. All of your trades, to be exact.
Going over your complete trading record to figure out which transactions have worked for you and which haven’t takes a lot of effort. But, hey, a few hours is a little price to pay if you want to regain your trading mojo, right?
Break down the data into trading sessions, currency pairings, long or short positions, trade methods, and so on as you examine your previous transactions. This will assist you in identifying profitable patterns that you may not be aware of when trading.
2. Stops and objectives
Examine the trades you lost because you set your stop loss too low or your profit objective too high.
Have you considered the present market volatility? Keep in mind that certain pairings are more prone to larger fluctuations than others. Were you able to factor in the volatility of the particular pair as well?
Just keep in mind that if you expect the markets or the currency pair you’re trading to be more volatile than usual, you should set your stop a little broader.
However, if volatility is low and markets are moving sideways, don’t set unrealistic profit objectives.
3. Dimensions of the position
If you’re having trouble winning, consider lowering your trade size and risking less until you get back into the swing of things. For a while, forget about your profit/loss and concentrate on acquiring a better sense of the market and restoring your trading consistency.
Once you’ve mastered it, you may progressively increase the size of your trades again.
“All right, I’ve figured out which trading tactics normally work and what modifications I need to make. “What do we do now?”
So, what exactly are you waiting for? Of sure, employ such tactics and make the necessary modifications! The sooner you regain market synchronicity, the better.
Your account will appreciate you if you take the time to study your diary, make the required modifications, and stick with the configurations that work.
However, when you acquire confidence and develop your account, keep your position size small. While there’s no assurance that your trades will be profitable, you do have control over how much money you risk every transaction.