In the trading game, losing streaks are as normal as rain in fall. It’s something every last one of us had gone through it and kept running in this game.
No strategy out there will ever provide a 100%-win rate, and you don’t need a 100%-win rate to be successful as a trader.
But that’s a different topic I will be covering, for sure.
Now, I want to write about losing streaks and how to overcome them. How to go through this. So, here is my list of 8 things a do, whenever I have or face a losing streak:
You are the one responsible for the outcome of your trades, winners or losers, you are to be blamed or congratulated for.
Sentences like – my broker is trading against me, or I had bad luck today, are just excuses and beginners behavior.
You need to fully accept the fact that all done in this game is you, no one else is responsible for the outcomes given to you.
Once you understand this fact, you can put your grip together and move on. Losing streaks are a normal thing in this business.
We all have them.
Don’t try to chase back the losses
When you encounter a losing streak, the worst thing you can do is to chase the market back to regain your losses.
This will always lead to more losses than the previous ones. This will always lead you to a bad mental state which can hurt your trading performance.
Don’t be a fool, never do this. Ever!
Take a break
“Three losing trades in a row, turn the computer off, and get out the door!”
This is something I always do. It works nicely for me. If I have 3 losing trades, one after another, I stop trading for at least 24 hours.
I take a break, do some chores, go out with my wife and kids, take a drink with friends, hit the gym. The best option is to be away from the monitors for at least 24 hours.
Personally, I don’t care what is going on with the markets in those 24 hours, I just take a break. My focus was not good, this is what the 3 losing trades are telling me.
I need some “me” time to regain confidence and do what I love doing and continue trading.
Analyze the losing streak you had
Once the 24 hours pass and I get back to the screens, the first thing I do is analyze the trades I had. I need to understand if the trades I took were done correctly from my side.
I look at the entry line, the entire move of the trade, I take down notes.
Looking for a mistake in your own work can be hard sometimes. But that is something that needs to be done if you want to be successful in this game.
Do it. Don’t hesitate.
Be harsh on yourself. This will make you money in the future.
Make a new trading plan
If you didn’t follow your trading plan or you did but it’s not working anymore, you need to go back and start again.
You need to write down everything you may need to continue working in this business in the best way possible.
Writing a new trading plan is just a start.
Do some demo or mental trades
Whenever in a losing streak I always take some time from the live trading. Instead, I go and do 2 things.
The first one is taking a couple of demo trades, just to get back to normal. At the same time, the second thing I do is go and take some mental trades.
Mental trades, you may ask?
In my head, I take the trade according to my trading strategy and check the outcome for it. I do everything I am doing live but just in my head.
This sometimes helps me to regain the focus back and continue where I left off.
Go back to the markets on your live account
When the time comes, I jump right back into the trading game. But I don’t trade the full size immediately.
I go smaller to be 100% sure that I am back in the game in the best way possible.
Never give up
This last point I personally consider the most important one. Don’t doubt yourself, ever.
Always trust your strategy and yourself. Be sure that you are doing everything in your power to become successful in this game.
It’s not a straightforward process, it’s not an easy process. But you need to be consistent here.
You need to come back every time you are facing difficulties and continue trading.
Always remember why you started trading in the first place. What was your goal, your inner motivation to become a trader?
Always have that in mind and just move on.
Losing streaks are normal. Bad trades are normal.
Everybody has a losing streak. Accept that fact, work on improving yourself and continue trading.
You deserve it!