There are certain times when it’s prudent to give your trading campaign a break. This could be due to a forex market related event, like a big news announcement, or perhaps during times of very thin liquidity, or a host of other reasons.
But there’s another reason to back off the throttle, and it’s a more personalized one. It’s when you are in a trading funk. Let me explain…
If you experience a loss, or maybe a little string of losses, it’s very easy to get down on yourself and feel bad, angry, ripped off etc. And this is exactly the time that your trading plan can fall apart and go flying out the window.
One of the most common indications that this has happened is the old “revenge trade”. That’s when you have a loss – maybe just a normal loss, or, possibly a loss that happened because you made a mistake. Either way, if you decide to “get back” at the market, and “show them who’s right”, usually you’ll lose. In fact, the best thing that can happen is that you DO lose in a situation like this, because if you win, you’re being rewarded for a bad habit. A very bad habit.
Furthermore, if you find yourself at your computer for the new trading day, but you’re still upset about a previous loss or mistake, or maybe you have other things going on in your life that are causing you some stress and anxiety, then you are not fit to trade! Go away and get yourself re-centered and in a positive frame of mind. The markets will be there when you get back, but to continue trading with a negative mindset is very poisonous and will definitely not serve your higher purpose.
Looking for valid trade setups and examining charts and price action obviously needs to be done, but the biggest component of trading is psychological. So why would you not spend most of your time working on yourself?
One of our very long time Coach’s Corner members, Dave Deming, realized a many years ago that, more than anything else, this was a psychological game. He spends almost all of his efforts on the mental aspects of his trading, with very little chart time by comparison. The results? Well, I’ll tell you this: you would LOVE to have his track record. Very, very rarely does he have a losing week of trading.
As the late Jim Rohn said: spend more time on yourself than you do on you trading (or words to that effect). And if that means taking a break for a day or 2 in order to hit the reset button, then do it. You’ll feel much better for it and you can come back with a fresh, positive attitude.
Wishing you all the best!
I have a short story to tell you, and I hope this gets you thinking and reflecting on your own forex trading. This story was one that a Coach’s Corner member brought to us during one of our CC sessions, and as you’ll see, very relevant to trading.
This person had been in the CC for just over a month, and was starting to really notice some positive change. In fact he sent in a trade that he had taken, and he was really happy about what he had done, and so he should have been, because based on what he’s learned, he did a perfect job of reading what was going on with the currency pair he was trading, the EUR/USD. He recognized the setup, and he entered the trade and took pips out of the market. Continue reading