Every trader has, is and will go through long periods of continuous loss, which is an integral part of the trading career.
However, if you are having a long run of losses, burning out too many accounts or losing large amounts of money for a long time, then it is time for you to rethink your trading method, and have responsible for the bad results.
Step 1: Admit that you are the root cause of all your problems
Our biggest enemy is ourselves, when you were born and grew up, we felt so many different emotional states: greed, fear, hope, regret… All of them is basically against you in the market.
So the first step, you need to understand that you are the cause of your failures, not because of the market, not because the world has been so volatile lately, not because of the weather today suddenly getting too hot…
We need to control and control ourselves if we want to be a successful trader. This is really difficult for everyone, and so most people who participate in forex or stock trading leave with an empty wallet.
Once you understand this, through a reasonable trading method, discipline to follow the principles set out… you can gradually control yourself and trade effectively.
Step 2: Take a break for a while, temporarily away from trading
The next thing you need to do to “cure” the disease of prolonged losses, is to stop trading for a while. I’m sure you’ve thought of this, but most people will trade, trade and trade, even if they still lose money and still burn their accounts. They just stop until they decide to never enter this market again.
This step is also very difficult to do, but this is when you need to stop to see everything, avoid yourself losing control of emotions. From there you can know where you are going wrong, how to correct…
You can also trade with a demo account, which is also a great way to stay in touch with the market. Always look at reality, accept it and you will be on the right track on your way.
Step 3: Becoming a boring trader
Boredom is one of the essential elements of your trading.
Trading is not a walk to the mall, entertainment or casino, you should not feel excited, excited, impulsive and emotional once you watch the market move.
You plan each trade, it may lose, it may win, but it must not surprise or surprise you. It’s all just a matter of logic. You already know and have accepted your loss or gain on each trade (with stoploss and takeprofit), there is nothing interesting here for you.
Step 4: Be patient, consistent, and more confident with your trading method
If you are on a long losing streak, you may not have the right approach to your trading. This goes along with my above suggestion about trading boredom. Basically, you need to make a habit of long-term trading, with no significant changes in the next few weeks or even months or years.
On each day, you spend a certain amount of time observing the market, identifying trends, resistance/support levels, good candlestick signs if any… If no good opportunity appears, you shut down your machine. Calculate and wait for the next time schedule to turn on and observe again.
Repeating these consistent habits in your trading method will help you avoid a lot of emotional impact, keep your mind clear and objective, thereby avoiding mistakes and see really good opportunities.
Step 5: Be clear about your risk tolerance
Each person has a different level of risk tolerance, no one is the same. How much money will you lose for a losing trade? If you can’t answer this question then this is one of the big reasons why you are experiencing constant losses.
Successful trading is all about good risk management. Many traders ignore it and don’t focus on it, they often think about how much money can be made? You must become a successful risk manager before becoming a successful trader.
If you are risking too much (relative to your account) or especially not having a stop loss, if you are trading with a situation where you cannot sleep well every night for fear of losing your money, it means you will lose money very quickly.
A lot of people have a very high win rate, but with just one losing trade, they can lose their entire account. Enter with the amount in the stoploss that makes you comfortable, don’t be greedy for big trades to make big profits. You can trade for the rest of your life, if you want to be fast, you have to take it slow.
Step 6: Don’t focus on low timeframes
You shouldn’t (or can’t) be impatient to find trade orders all the time. If you do, you will drive yourself crazy and at the same time blow up your account very quickly.
A lot of traders think that, by observing time frames like m5, m15, m30, they can increase their chances of finding good trades, increase the number of orders and thereby increase the amount of money they make.
It’s an illusion, with tracking low timeframes means you have trades with a low probability of success and a high chance of losing money with every bad trade.
Step 7: Review your own trading method
If you are trading an irrational strategy, you have a sloppy “tool” that makes it impossible for you to make a profit, or even a long-term loss.
A good trading strategy, in my opinion, should be simple first. You should not have too many tools – indicators, you should not follow too much news… to decide whether to enter this or that order. Too complicated, too confusing, too much multidimensional information will make you confused and unable to trade correctly.
However, you should not immediately assume that the method you are using is wrong and ineffective when you are losing money. Take a look at yourself first, think about your own mistakes before blaming the method, it may not necessarily be ineffective.
If “unfortunately” that you are in a long losing streak, I hope with this article you can look back and improve your trading results. Trading is not a battle between you and the market, not between you and other traders, it’s a battle between you and yourself.
Wish you a productive trading day.