Ever found yourself in a trading slump that made you question your skills? Having a hard time regaining the motivation you need to keep hustling in the trading arena? Even seasoned traders have found themselves in this kind of rut at one point or another in their career so we’ve rounded up some tips on how to improve your trading mood if you find yourself in a similar situation.
- Recall your excitement when you first started trading.
Do you remember your first few days in the financial markets, learning about the ins and outs of technical analysis and trying your hand with a few demo trades here and there? Remember the time when you decided to make the leap from a demo account to a real one and how your heart was pounding when you entered your first live trade?
Apart from recalling your emotions and nervousness during your newbie days, also try to think about the factors that were motivating you to learn about trading in the first place. Is it to earn extra income? Did you want to put your rusty high school economic knowledge to good use? Is it the thrill of catching big market moves? Whatever it is, use these motivations to remind yourself why you’re watching price action day in and day out and how potentially rewarding this practice could be.
- Review your best trades.
When you’re in a losing streak or struggling to recover from a large drawdown, it can definitely be difficult to stay positive and believe that you can eventually climb out of the hole. For one, you are probably doubting your trading skills or your strategy, thinking that you’re falling behind the curve or no longer implementing an effective plan.
In this case, it could help to look back at your trade journal and review your best trades. It doesn’t have to be the biggest wins or the best entries and exits. It can be those trades wherein you’ve managed your risk properly or were able to press your advantage in longer-term trends. Not only will these remind you that you do have what it takes to make consistent profits in the trading world, but these can also help you focus on your strengths as a trader.
For instance, if you’ve noticed that most of your best trades are those that were taken during trend pullbacks or ahead of top-tier events, then you can remind yourself to be more attuned to these types of market scenarios moving forward. If you’ve realized that you’ve caught pretty decent wins by trailing your stop, then you might need to apply this risk management practice more often. Remind yourself that you’ve got a good trading record and this could give you the confidence boost that you need to perform better.
- Read trading psychology books.
Another tried-and-tested method to pick up your trading mood is to read trading psychology books or articles. Sometimes it’s tough to tell what exactly isn’t working for you at the moment, and reading psychology articles can guide you in figuring out what you need to improve.
Besides, these types of articles or books are often written in an uplifting tone that can be reassuring one way or another. These are also filled with examples, be it in trading or in other endeavors, that are relatable and helpful in making you realize that you are not alone in hitting roadblocks in your trading career.
Aside from that, reading can also take your mind off the markets for a while, especially when you’re feeling overworked and burned out. More often than not, trading problems can stem from being too zoned in the markets and forgetting to clear your head, making the process much more stressful. Reading trading psychology books is one great way to build your trading knowledge without having to go into the usual routine of watching the charts or reading economic reports.
- Take some time off.
If taking some time off the trading screen by reading a psychology book still isn’t enough, you can always opt to clear your mind of any trading-related thoughts for much longer. After all, trying to trade when stressed can expose you to risks of overtrading or making hasty decisions as opposed to being able to think more clearly in a relaxed state.
If you find yourself in this situation, try to take a quick walk or watch a movie – anything that can get your mind completely off the markets for some time. If that’s not enough, you can even go on a vacation then come back in a more refreshed mood. This way, you can be able to focus on what’s moving price action, filter out the noise, and make trading decisions with a less cluttered mind.
- Explore new strategies.
If you find that the reason for your trading slump is the lack of effectiveness in your trading strategy, you can always explore new ones that might be more appropriate for the current market environment. Take yourself back to the process of studying technical indicators, adjusting parameters, conducting back tests, and running some forward tests to make more observations about the market. Even if these new strategies don’t work out, you could gain a few new insights that can allow you to tweak your existing plans.
Besides, the feeling of going back to the basics and building blocks of trade strategies can put you in better sync with the markets. You might be able to identify new patterns or figure out ways how you could’ve played your previous setups better so that you’re more conscious of these possibilities in the future.
One way to go about this would be to consult your fellow traders about the strategies they are using or working on at the moment. There’s no shame in seeking the help of a mentor or forum members in trying to figure out how you can improve your own trading.
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