Talking about our failures isn’t easy.
That’s why, when it comes to trading psychology, most of us avoid it, despite it being an important (if not the most important) element to our success as traders.
Have you ever gotten in a position, which made you feel sick inside every time you looked at it?
Sometimes the best thing to do is wipe the slate clean.
However, too many of us won’t do it because it means accepting defeat and failure.
But that’s not how trading works.
Believe it or not…
The same skills which make successful business folks— often hinder our trading.
It takes us through this constant cycle of emotions, as depicted by the emojis below.
And the first step to restarting your trading is a simple word…
The first step to correcting a problem is admitting you have one.
As stupid as it sounds, far too many of us will continue ignoring our trading problems.
We tell ourselves we know what the issues are. Why bother creating a trade diary when you think you see the problems.
Except that’s how it starts.
Complacency is the enemy of productivity. We get into a groove, hitting the high end of the market psychology curve. Pretty soon, autopilot takes over and we fail to adjust to one change or another.
Instead of taking a step back, we buckle down twice as hard, trying to force our will on the markets, which only makes things worse.
I’ve been down this road many, many times.
That’s why I PRACTICE accepting my issues. Sometimes it’s overtrading. Other times, it’s not scaling in or out of a trade.
Mental fortitude is a skill just like any other. You need to train yourself.
Yes, some people are naturally gifted athletes or traders. The rest of us have to work at it.
But you even begin working on something without first accepting that there’s something to work on.
A clean slate.
Sometimes we all need one, difficult as it may seem.
I speak from personal experience that clearing out my entire portfolio and starting from scratch is like a bandaid. It hurts to rip off. But once it’s gone, there’s a fresh sense of relief.
This is the same advice I gave to a friend of mine recently.
He struggled to find any consistency in his trading, something we’ve all experienced. However, I noticed him getting a little edgier. His positions were growing in frequency and size.
Speaking with him, I could tell he wasn’t in a great headspace. It appeared like he was going on-tilt.
So, I told him to clear his portfolio, take some time away from the charts and come back.
His response, ‘What if I miss some great trades like the ones you’re taking?’
I stated the obvious, ‘That hasn’t worked yet, so why would it suddenly start right now?’
Traders love to overcomplicate things. I find it ironic that I can explain my TPS setups to LottoX members in three core steps.
That’s after the come with all sorts of ideas in their heads about what they should be trading, or what this indicator means, or how to use this particular pattern…
Even writing about it feels tense.
Which is why the cure happens to be starting over.
A fresh start
Once you’ve taken a break, cleared your head, and are ready to get back in, it’s time to create a game plan.
First things first – start slow.
Any time that I restarted, I always wanted to jump back into trading head first, which is the last thing I needed.
Instead, sit down and write out a trading plan. This should have concrete goals and milestone dates. What it shouldn’t have are profit goals.
If you find yourself tied to money, then stick with a simulated account.
The goal with the restart is to put yourself on a new path and practice the right way, not what feels best.
Next, and this is critical, keep a journal of your trades. If you can’t manage your trades in the journal, then you’re taking too many of them.
A trader’s journal should be his/her best friend. It’s that honest angel that tells you right from wrong in black and white.
Lastly, narrow your focus to one type of trading strategy or style. If you go back to the one you had before, make sure you document it in your journal. The last thing you want is to try a strategy that doesn’t work because it feels right.
Keep learning no matter what
Trading isn’t something you learn once and are done. It’s a constant battle against yourself and the ever-changing market.
If you find yourself struggling to find direction in your trading, check out my LottoX webinar. In it, I’ll explain how I create trades from my strategies and analysis, the very ones that I show to members and teach them about every week.