If you can handle a losing streak well; you are better than 75% of traders. So here are 5 tips on how to survive a losing streak:
1. Don't trade smaller - Very controversial opinion. If you feel too much negative emotions to trade then - don't trade. Take a break for a few hours or days. But if you reduce the position size then it will be much harder to get back on track. Let me give an example:
You lose 5 trades all with 1% risk. You are now down -5 RR (Risk to reward) = in this case -5% on your account.
If you now reduce your position size and take 0.5% risk per trade. You would need to make back 10RR to get to your initial balance. This can be very demotivating. So trust your system en keep on trading as you planned it.
2. Don't focus on the outcome of one or a few trades. It is a statistical fact that you are going to have losing streaks some times and it's important not to take it too personally. The market isn't out to get you. Try to detach emotionally from the trades and focus on the bigger picture. Focus on things like: did you follow your rules and strategy? If you did - then you did all you could and there is no need to talk down on yourself.
3. Learn from your mistakes - mistakes are opportunities for growth. You can do this by always documenting and analysing your trades, eventually you may see a pattern in your losing trades. For example, you may see that the trades you make during London session tend to hit your stop loss. Sometimes a little tweak is all you need to give you the winning edge.
4. Take a break and go for a walk - clear your head and get some fresh air. It's amazing what a little bit of sunshine and movement can do for your mood and perspective. It also makes sure that you don't do stupid things to make back the money you just lost.
5. Don't give up - every trader experiences losses at some point. It's important to stay motivated and not let a losing streak discourage you. Keep a positive attitude and remember that tomorrow is a new day with new opportunities.
The psychological side of trading is the hardest but most important one. Without the right psychology in place you can never be successful.
Let me know what you think and I wish you all a successful day.
1. Don't trade smaller - Very controversial opinion. If you feel too much negative emotions to trade then - don't trade. Take a break for a few hours or days. But if you reduce the position size then it will be much harder to get back on track. Let me give an example:
You lose 5 trades all with 1% risk. You are now down -5 RR (Risk to reward) = in this case -5% on your account.
If you now reduce your position size and take 0.5% risk per trade. You would need to make back 10RR to get to your initial balance. This can be very demotivating. So trust your system en keep on trading as you planned it.
2. Don't focus on the outcome of one or a few trades. It is a statistical fact that you are going to have losing streaks some times and it's important not to take it too personally. The market isn't out to get you. Try to detach emotionally from the trades and focus on the bigger picture. Focus on things like: did you follow your rules and strategy? If you did - then you did all you could and there is no need to talk down on yourself.
3. Learn from your mistakes - mistakes are opportunities for growth. You can do this by always documenting and analysing your trades, eventually you may see a pattern in your losing trades. For example, you may see that the trades you make during London session tend to hit your stop loss. Sometimes a little tweak is all you need to give you the winning edge.
4. Take a break and go for a walk - clear your head and get some fresh air. It's amazing what a little bit of sunshine and movement can do for your mood and perspective. It also makes sure that you don't do stupid things to make back the money you just lost.
5. Don't give up - every trader experiences losses at some point. It's important to stay motivated and not let a losing streak discourage you. Keep a positive attitude and remember that tomorrow is a new day with new opportunities.
The psychological side of trading is the hardest but most important one. Without the right psychology in place you can never be successful.
Let me know what you think and I wish you all a successful day.