Most traders know the feeling. They spend years building a trading strategy, trying to trade on demo accounts and then, after lengthy and careful contemplating, they find the confidence to go out into the world of real trading.
Once they get there, they find that sometimes it works and sometimes it doesn’t, and after a while, they realize that they can’t make money on the market even after years of practice.
And then the time comes when they start wondering if it’s worth it at all and whether it would be better if they just gave up.
Some people do give up, because trading isn’t for everyone, and decide to place their money in the hands of experienced traders (strategy providers). The people who don’t give up are those who aren’t used to losing. They are people who wouldn’t be able to admit that they failed at something. They can’t make peace with the fact that trading just isn’t for them and they keep trying. Those people are warriors and they often accomplish great things. But the markets are ruthless and it’s necessary to always be on your guard.
So, what do you do when you’re not doing great in trading, you’ve lost your whole account or a large part of your capital, but you refuse to give up? First, you need to realize that it is very possible that it is your fault that you lost your money. Whether you were tricked by an unreliable broker who pushed you to enter trades with his “100% correct” advice, or you didn’t handle well your own trading strategy, it’s clear that what didn’t work in the past will not work in the future. You need to change something.
Remember why you started trading
If you’re thinking about giving up trading altogether, it’s important to find new motivation, because without it, you can’t give your all to anything. Remember what made you want to start trading, remember the feeling you had when you first learned about the possibility of making money on the markets.
No more nine-to-five jobs. No bosses who interfere with your life, no employees you have to oversee. A potential income. And most importantly of all, freedom. Many good things await good traders. It’s important to realize in time that the reward at the end is far away and that the path to get there is rocky. It is good to remind yourself of this every once in a while. Trading is very challenging, especially mentally, and when worst comes to worst, you have to remember why you’re doing this.
The stories of successful traders are very inspiring. Pick up a book and read about how people who have already achieved something in trading think. These books are often easy reads and you can learn more from them than you might think. Try starting with the bestselling book Millionaire Traders by Kathy Lien.
Forget getting rich overnight
One of the main reasons retail traders lose their money is their effort to get rich fast. It is not impossible, but it is more of an anomaly and it takes a lot of luck, which you can’t count on in the long term on the markets.
If your goal is to increase your capital by hundreds of percent, you have to take a huge risk. Probability will then work its magic – trading too much or with too high a risk usually leads to the trader losing his account and money, leaving him very frustrated. You have to stop wishing for fast and easy money, otherwise you might end up the same again.
The most ironic and most difficult thing about trading is that to make a lot of money, you need to start out slowly and carefully and forget about any potential profit.
Create a plan
Yes, everybody knows they should have a plan. They read about it everywhere. But let’s be honest – how many of you actually have the way you trade written down somewhere? It’s about developing discipline and following the set rules. In trading, you don’t have a boss and you set your own rules that suit you for yourself. But following those rules is crucial, especially when it comes to money management.
When you write down your thoughts on trading, it’s easier to later find errors in your strategy when something isn’t working. You also have a physical document you can read any time you are about to go to the markets. When trading, having the plan in front of you can also help you eliminate mistakes you would otherwise make if you gave in to your emotions. It will also help you keep a cool head.
Check the risks
Trading is a risky business and if you’re scared of losing money, it’s most likely not for you. The sleepless nights aren’t worth it for most people. Make sure you know beforehand how much money you can afford to lose and adjust your money management accordingly. The only thing you can influence in trading are your losses, so keep an eye on them, because once they get out of control, they can cause irrevocable damages and hurt your mental health to the point where it’s hard to get your trading cool back.
Returning to trading
After deleting your trading account, it’s important to rest for a bit. Think about what exactly happened, why it happened and how you should change your approach to prevent it from happening again. You need to take a break from frustration and negative emotions caused by losing money. But you can still keep contact with the markets. Enter a couple of trades on a demo account, try to modify your strategy and gain a bit of healthy self-esteem.
When you feel ready, you may begin trading using real money again. In the beginning, make sure to keep in mind that you have to respect the risk your set beforehand. Don’t try to score any home runs. Focus on your trades being precise and on smaller profit, for example, 1:1. That way you’ll have more profitable trades, which will strengthen your self-esteem and give you confidence that you’re doing it right. You only need succeed in a little over fifty percent of your trades to make money.
Don’t forget that psychology plays a key part in whether a trader is successful or not. Stay relaxed and focus on important aspects of trading and you’ll have a chance to be successful. The reward waiting for traders is beautiful, but it’s not easy to get it. Take trading seriously and keep in mind that you have a good a chance to get that reward as anyone.
About the Author
Team Purple Trading
Purple Trading is a true and 100% fair ECN / STP forex broker providing direct access to the real market. High speed orders execution, no trade-offs, no limits for any type of trading, the most advanced trading technologies. Explore more about Purple Trading at www.purple-trading.com .
P.M. Purple Trading is a trade name owned and operated by L.F. Investment Limited., 11, Louki Akrita, CY-4044 Limassol, Cyprus, a licensed Cyprus Investment Firm regulated by the CySEC lic. no. 271/15.