Regain Your Confidence During a Forex Trading Slump with These Simple Steps
Posted on 8th Feb 2018
Forex losing streaks or slumps are completely normal and an unavoidable fact of trading. FX trading is a profession that hinges on speculations and probabilities, so instead of harbouring the misconception that losses won't ever happen to you be realistic and learn how to cope with such trading lows. Even the best trading strategy and technology is susceptible to few losses every once in a while. During such periods we often feel diffident and tend to lose sight of all the things that brought you success in the past. So how do you recover from a trading slump? Here are few simple steps to stay positive and focused during a trading nadir.
- Step 1 Evaluate Those Trades That Performed Well: If you have been maintaining a trading journal it will prove immensely handy during a not-so-good-trading period. By referring to it you can get to know which trading methods and setups worked in your favour. Also looking at your trading successes in retrospect will boost your morale.
- Step 2 Discover Your Trading Forte: As a forex trader it is important that you are aware of your strengths and weaknesses. In order to realise your full trading potential, recognise the trading style that you are most comfortable with, the key areas wherein you need improvement and the pitfalls. You can never hope to be successful unless your personality goes hand in hand with your trading style.
- Step 3 Be Confident of Your Trading System: The market is always in a flux and you win some, you lose some. You need to have belief in your trading methodology in order to maintain a healthy attitude and stay composed. No trading rule is completely failproof. Of course, it's common to lose focus and confidence in your system after a spate of losses and you might even be compelled to tweak your strategies a bit. But if you begin meddling with your system you may only end up ruining your efforts where otherwise you might have got positive results had you been a bit more patient.
- Step 4 Take It Easy: As a forex trader you cannot totally let go of your emotions and especially after a series of bad trades you will face emotional vulnerability & low self-esteem. Sometimes you might set out to trade after a rough day at work or in the midst of some domestic crisis. In such situations it's best to pause your trades for a bit instead of sitting in front of your trading screen with a lot of negative emotions. Consider taking a break and resuming your trades once you regain your composure and have a clearer mindset.
- Step 5 Trade in a Conducive Environment: Often traders become preoccupied with one market setup and end up overtrading which damages their trading account. Traders often squander money on bad signals and try to fight the markets simply refusing to see the writing on the wall. Always set a rule to halt your trades for 24-48 hrs at least after 2-3 continuous losses. If you trade in trending market conditions your chances of being successful will be higher as the market will have a definite course to it.
- Concluding Remarks: Every single trade is unrelated and independent of your previous trades. If you have experienced 10 losses that in no way means that the next 10 trades will also be losing ones. Don't lose heart or indulge in panic trading out of desperation. Otherwise your money will flow into the pockets of other professional and disciplined traders. Always direct your focus on the method rather than only on the profits. Don't stop believing in yourself and with adequate discipline, patience, a never-say-die spirit you can tip the scales in your favour & recover sooner rather than later from a trading slump.
