I recently had some questions from traders asking how to turn around their trading results.
Notice I did not say “Losing Streak.” I prefer to say “Trading Results.” By simply changing a couple words, notice how that sounds and makes you feel. Changing your vocabulary plays an important role in conditioning yourself for a successful business.
Improve Your Trading Results?
1. Understand that losses are normal and that everyone goes through them, even the professionals.
2. Know that challenging trading days will eventually end. If they don’t, then you need to make a correction in your trading style and methodology.
Take a deep breath and relax. Go do something you haven’t done in awhile that you enjoy. This will help clear your mind. If nothing else, take a nice walk in the woods or around a lake where nature abounds.
3. Go back and review the trades that did not produce winning results. Feel the pain again. See what you did right and determine what you could have done differently.
4. Ask yourself new empowering questions. For example, “What can I do different next time to make this a winning trade?” You will be amazed how your brain answers these questions. It is a conditioning process. If you do not condition yourself to win, you are conditioning yourself to lose.
You will notice that most traders say, “Oh, why did I do that?” or “I’ll never get this to work.” Bad questions and bad statements… and… your brain will answer those questions. Change the questions you ask yourself to be constructive rather than destructive to yield improved results!
5. Go back to simulator trading. Make it fun, give your significant other $5 or $10 each time you lose a trade. Wouldn’t it be better to give it to him or her rather than to the market.
And whether you know it or not, you just created an accountability partner. You may or may not like this, but it will certainly help make you a better trader. With someone holding you accountable, you will tend to pay more attention to your trading as a business rather than just a hobby.
6. Go back to the basics. No matter what trading system you use, focus on one trade setup at a time and master it before proceeding on to the next trade setup. In my case, I like to use the CCI and the ADX combination to support winning results. Remember to take quality trades, not quantity trades.
7. Stay with the trend, NO COUNTER-TREND TRADES. You have been told this time and time again and yet, some of you still take counter-trend trades. Counter-trend trades barely have a 50% win-loss ratio. Enter a trend trade on a pullback. Buy on fear, sell on greed.
Observe where price action is in relationship to the moving averages. Use a directional indicator with moving averages to help keep you on the trending side of the market.
8. Reduce your contract size. Trade only 1 contract per $3000 in your trading account. You need to preserve the capital in your account in order to be able to come back and trade another day. At the top of your trade log, there is a profit target and loss limit. Use them and stick to them.
9. Reduce the number of trades you take per day. Learn to SOH (sit on hands) more often. I have noticed that when I trade 10 or more times a day, I tend to lose more money. This is sometimes called “revenge trading.” However, when I trade 2 to 5 times a day, I end up in a much more profitable bottom line.
10. And last but not least, go back to the Trading Manual and review the step by step instructions. One step that is very important is your trading environment.
Inform your “outside influences” that you still love them, but during this time, you need to concentrate on your business. I cannot count the times I have been told that “I missed a trade because someone was talking to me” or “I had to let the dog out” or “My spouse just came in to ask me a question” … you get the picture.
I hope that helps you re-focus back to trading as a business and not just a hobby.
To Successful Trading,
Trained Life Coach and Trading Mentor
Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time. Past performance is not an indication of future results.