How To Break Out of a Trading Slump
April 30, 2007 by Trader Rich
The definition of slump that I find most fitting is "a period
of decline or deterioration." Since trading is so psychological by
nature, this period of decline or deterioration has to be expected. I
don't think there is anyway to avoid it, it's inevitable. The bottom
line is that I've either been in a slump or my level of inexperience
and ability is just not sufficient for it to be called anything but
expected.
What can you or I do (or not do) to break out of this slump?
- Take steroids like athletes do. This is certainly one way to do
it in baseball or other sports but unfortunately in trading, there is
no such thing. - By trying harder. This seems like a sure-fire way to prolong the
slump and this added pressure only makes things worse. This could lead
to overtrading and heavier losses. - Taking a short break. This sometimes helps me to refocus and
takes my mind off the negativity. This can definitely be a difference
maker in breaking out of a slump and certainly has to be seriously
considered as a "cure." - Take a complete inventory of why you love trading. Personally,
if I don't love something, I just don't want to put the time or effort
into doing it for there to be success. - Trade in your demo account. I feel like trading my demo account
throughout April has helped considerably. I've managed to take my demo
account very seriously and I have a new fond respect for its ability to
help me break out of a slump. - Change your routine. If you don't have a daily routine, maybe
creating one would help and if you already have one, maybe changing it
would make all the difference. - Stop thinking in terms of winning and losing. Focus more on
whether your overall trading skills are improving even if you're losing
more than you're winning. - Unstress yourself. Do something else other than trading that can
relieve the everyday stress of trading and life in general. Sometimes
I forget why I'm striving to be a full-time trader, to have more
freedom and security to enjoy things outside of earning a living. - Try something new or simpler.
- Find someone that can help. This someone could be in person, in a book, or just another fellow trader.
I'm not a trading expert, nor an expert in the field of psychology
but I read a lot and breaking out of a trading slump is really no
different than breaking out of any other slump that life throws out at
you. I think we all have the ability to break out of it because of all
the experience from past slumps that we've encountered. If I ever want
to be a full-time trader, learning how to break out sooner than later
can make the difference in whether I'm a success or failure.
Lately, I feel like I'm ready to break out of this slump… I just feel it.
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Human beings have their own cycles like markets do. Everything is cyclical, that’s the process. I guess we have no choice but walk through these cycles. Realizing that someday it will return. Just my 2 cents.
Thanks Alex. Your comments are always welcome.