Every trader sooner or later experiences a crisis, receiving a loss for a loss. How to overcome the crisis - 7 ways for successful traders.
All traders in their careers got into tilt - a situation when everything falls from the hands and nothing happens. Already the nerves are running out, and the deposit is slowly draining through your fingers. How to overcome the crisis? This article is about this.
1. REFLECTING ON TRADING, FOCUS ON PROCESS, NOT FOR PROFITS / LOSSES
Traders like to set themselves goals, but still, somehow, monetary goals create unnecessary pressure. More effective goals are those that focus on the trading process, such as limiting losses to two ticks, if you are a scalper, or holding the deal before the trailing stop. Good setup: "If I trade only by the rules, profits will come." It removes most of the pressure from the responsibility for the result.
2. INCREASE THE RISK AGAIN
Psychologically, the risk is similar to a magnifying glass, it greatly increases the possible pressure. The unsuccessful throw in the first minute of the match in basketball is the same miss as in the last second of the competition, but the psychological difference between them is huge.
Traders who try to drastically increase the size of a position quickly find out that a deal that worked out with 1 lot may not work on 10 lots because of pressure that causes too early loss or too quickly to take profit. A gradual increase in size is much more effective than a sharp jump, which turns out to be emotionally unprepared.
3. STAND FROM THE SCREEN
Self-interest during the period of concern for the result really prevents accurate processing of market data, because the part of the brain responsible for the perception of market models and the reaction to them, is not activated. It is much better to move away from the screen and re-focus on the market than because of fears of acting blindly, exacerbating an already difficult situation.
4. USE MENTAL REPETITIONS TO MAKE THREATENING SITUATIONS BY SIGNS
This is perhaps the single most effective technique I have found, helping to reduce or even eliminate fear for the results of work. It is often necessary in the imagination to lose threatening situations, mentally rehearsing the necessary sequence of responses. This way you can remove most of the stress, when such a situation happens in reality. The goal is to mentally confront the concern for the result so often that the desired answer will become automatic - by force of habit.
5. ASSUME MENTAL REPETITIONS TO THE CONDITIONS OF CHANGED CONSCIOUSNESS
This is one of the best strategies. Learn to bring yourself into a state of extraordinary calm and concentration, and already in this state repeatedly rehearse strategies to exit from threatening situations. Thus, a trader can create a link between the state of consciousness and the right answer. Faced with a tense situation, the trader can only enter into the fulfilled state of mind and pre-rehearsed behavior patterns will come to the fore.
6. BEFORE YOU TRADE IN CHECK YOUR ISSUE CHECKLIST
Eliminating the perfectionist expectations at the beginning of the day, you will lower the pressure because of the result. As soon as the word "should" comes in from trading, it's time to step back. "Must" includes internal requirements to make some amount of money, trade with a certain frequency, win back money that was lost, etc.
Since concerns about performance are often fueled by excessive demands on oneself, setting and approving reasonable trading goals for a day can lead to a reduction in pressure.
7. RETURN TO THE WORLD
When something becomes too significant, the pressure increases exponentially. Traders who live on income from trade are particularly prone to worry about performance. If trading is your whole world and it does not work, there is a feeling that your world is collapsing.
By placing self-esteem eggs in different baskets, traders can ensure that inevitable drawdowns and periods of failures will not break their self-confidence.
Most traders who are convinced that they are not concerned with psychological problems are actually caught in a vicious circle when perfectionist demands on themselves increase the pressure of responsibility for the results of work, which leads to increased anxiety in case of failure and increasing demands to themselves in order to compensate for losses.
After a while, traders who fall into this circle are beginning to doubt whether they will ever succeed at all. Turning to face the source of their problems - to inflated expectations, which produce pressure - traders can often be transformed in an amazingly short time.