It can be difficult to continue the fight after a string of trading losses. When your ego is bruised and your self-confidence trampled under the proverbial foot, waking up to face another trading day can appear like an insurmountable task.
However, it is more important than ever to have a positive outlook after a setback. Only with the right mindset can you recoup your losses. Here are a few sure fire ways to turn negativity into optimism. First, revel in a bit of healthy, old-fashioned denial. Second, don't allow a downturn to have personal significance. Lastly, build up your self-confidence.
A Little Self-Denial Does the Body Good
You might be asking yourself how denial can possibly be healthy. Of course, denial on a grand scale, regarding a significant problem is never recommended. In fact, denial of this magnitude can be downright detrimental. What I'm referring to is a small dose of denial to relieve unrelenting stress. If you can forget your problems for one day, you may find that you have the mental and physical stamina to not only enjoy life, but also to get something accomplished.
Stress in known to be both physically and psychologically draining. If you are zapped of energy, how can you expect to drag yourself from the mat after a TKO (technical knock out)? Denial or a little bit of self-induced forgetfulness may help to calm your nerves, if only for the short-term.
Don't Be Overly Critical: Losses Occur to the "Best of Them"
It is at times when you would benefit the most from a little extra kindness and understanding (after a trading loss) that you are likely to be extra critical of yourself. Why people do not extend to themselves that which they freely give to others will probably remain a mystery.
When faced with a downturn in trades, we may take the loss to heart and view it as a personal affront. You may tell yourself, "Something must be wrong with me for this to have happened." Instead of viewing a loss as an expected, however unfortunate, part of the business, it takes on personal significance.
You may find that a pessimistic outlook is taking hold. Thoughts such as: "I will never be able to master the art of trading" or "I'm just a loser in the game of life. I should not expect to succeed" may be racing through your mind like a record that is permanently stuck.
Take a moment to step back and think realistically. Replace your "stinkin' thinkin'" and negative thoughts with self-affirming statements. Even if they are a little over the top and not entirely true, they can motivate you toward positive action instead of negative inaction.
Instead of telling yourself "I'll never become adept at trading", say to yourself, "A seasoned, successful trader is made not born. They took their bumps and bruises in stride, learned from their mistakes, and weighed each trade carefully to insure the best possibility of a win/profit. With time and by obtaining additional knowledge about various tried and true trading methods, I too can rise to the top."
It never hurts to boost your own self-confidence. If you keep it in perspective and don't trade recklessly or above your talents and skill level, a little positive "self-talk" wouldn't hurt.
Focus On Past Successes
You can also build your self-confidence by focusing on your past successes instead of failures. Think back on a trading success and how it made you feel; possibly confident, self-assured and on top of your game. As long as you don't view yourself as a "Market Guru" and start making outlandish trades and taking uncalculated risks, a little ego boost can be both healthy and set you back on a more optimistic path.
Take Smaller Risks
Another way to pick yourself up when you are feeling especially down, is to lower your sights just a bit. Instead of making a large trade, make smaller ones with the potential for a small payoff. This will help to boost your confidence as you witness gains instead of losses.
Regardless of how inadequate you may feel after a trading loss, remember that even the most confident, successful traders have experienced downturns. It is human nature to compare yourself with others, especially those in the same profession as yourself. Remaining focused on these comparisons will not help you out of your financial crisis. Learning from your mistakes and taking informed action is a sure cure for your monetary woes.
If your reserve of self-confidence is running low, there are certain strategies you can use to bring yourself up. Try a little old fashioned denial. It is not a long-term cure for what ails you, but is can relieve stress, which has a way of zapping you of the needed emotional and physical stamina to get things done.
Extend to yourself that which you would freely give to others if they needed an ego boost. That is, don't be too critical on yourself. Even if you have experienced a string of trading losses, it does not automatically spell your future demise as a trader. It may only mean that you have more to learn, but in any line of business, this is how you stay ahead of the game. This is by no means a character flaw and should not be viewed as such. Lastly, remain optimistic regardless the circumstances. If you wake up to face another day, it is another opportunity to turn losses into gains.