How do you react when you lose a series of trades?
In this video:
00:26 – The downside to trading and how do you react?
00:50 – The good and the bad
01:44 – Are you your own biggest problem?
03:31 – The market is unpredictable
04:15 – Back to basics
05:04 – Benefit from our 10+ years of helping traders like you
How do you react when you have a series of losing trades? It's critical you get this right to your trading success. So, let's get into it right now.
Hey, traders, Andrew Mitchem here, the owner of the Forex Trading Coach, with video and podcast number 323.
The downside to trading and how do you react?
Now, everybody tells you the good side of trading. I want to tell you about the bad side of trading, and more importantly, how do you react when that happens? Now it's all about losing trades. Now, we will have winning trades and losing trades as part of trading. But, what happens when you have a series of losing trades, maybe losing days, losing weeks, even losing months. What happens?
The good and the bad
Let's bring that back to a story that everybody can relate to. It's called life. In life, we have good times and we have bad times, and everybody goes through the same thing. And what often defines you as a person, as a parent, as a boss, as an employee, as a sportsperson, whatever it might be, what defines you quite often is how you react to those bad times. How do you get through it? What do you do to ensure that those become less and less?
You see, the problem is today that with everything being we want the quick fix all the time, a lot of people struggle when things don't go right. And you know, they blame someone else, they get depressed, they sulk, they give up, you know, everybody else's fault. It's the same in trading.
Are you your own biggest problem?
You see, people blame the market, they blame the broker, they blame everything. But very often, it's the person themselves that is the biggest problem. And it's how you react to that. So, you have a system, a strategy in place, and if you weren't happy with it, you wouldn't be trading it.
So, you're trading it, and you have a series of losing trades. What happens? Do you go back and analyse those trades? And in reality, you should be analysing all of your trades. But, do you go back and analyse those trades and go, “Do these losing trades fit my criteria? Do they fit my rules, my trading strategy? Yes or no?”
If they do, then great. That's part of trading, and you may be just going through a tough patch right now, because if they do meet your criteria, and yes, this is what I'm looking for as part of my trading plan, and unfortunately, it didn't work out, at least you stuck to your horse. You can still find things in there that you might learn further from those losing trades. But, if you stuck to your rules, then, well done. You've done what you should do as a trader.
If you didn't stick to your rules, that's where the problems start. So, rather than blaming everybody else or your broker or the market, how about, let's fix the problem, which is you, and go and analyse those trades and go, “Well, actually, do you know what? That trade there didn't meet my criteria, because of reasons one, two and three. Therefore, I'm learning that when I see that again in the future, I will not take trades that look like this and I'll only take trades that look like that.” So, that's how you can develop and how you can learn and how you can improve yourself.
The market is unpredictable
Now, don't forget we're trading in a market that's unpredictable. You never know what's going to happen. You know, even with the best laid-out plans and best laid-out strategies, no one can be certain of what's going to happen. You don't know whether it's a trending market, a range-bound market. Different currency pairs react at different times of the day or different months of the year, even. And then, you get political events and other things that completely disturb that pattern as well.
So, you have to trade what you see in front of you at the time, and you have to have a strategy that's robust enough to get through those times when your strategy may not be going so well. But you have to have a plan in place to deal with that.
Back to basics
So it comes back to a lot of the basics that I talk about all the time, and I've done so for 10 years now.
You have to have low risk in your trading. Low risk trading approach means you can be confident to more trades on without blowing your account, basically. It means also that if you trade with low risk, you forget about the number of pips that you make. They are irrelevant. That then allows you to trade multiple timeframe charts. And, if you have a good strategy that allows you to have high rewards risk trades, you can have a series of losing trades. But, every time you get a winning trade, it's more than likely going to make up for most of that.
So, have a good think about that, and see if the problem is you yourself. And if it is, what can you do to fix that?
Benefit from our 10+ years of helping traders like you
So I hope that helps. This is Andrew Mitchem. I'm the owner of the Forex Trading Coach. We've been doing this for over 10 years now, and if you'd like to know more, all you need to do is have a look at my website, which is the TheForexTradingCoach.com.
Bye for now.