5 Natural Reactions To Failure In Trading
Updated
5 natural reactions to failure in trading
It could be very useful to understand your natural behavior when you are faced to failure in trading. All of us are facing losses, sometimes these losses can be huge when come a krach or a bad choices.
The situation in itself will not determine the reaction of the trader. It is his personality, his history facing which will determine it.
1. Anger
Being anger is a natural feeling. It is the direct consequence of a loss. But you are not anger about the loss itself but about the causes which led to this loss.
In fact, before taking this position, you knew that it was not a good idea or even a good timing maybe because:
- The lot size was too big
- There was a big data released 1 hour later
- You moved the stop loss
- You bought too high
- You sold too low
- ...
You knew it but you made it ! Why ? Not enough patience ? not enough discipline ? You need to analyse it and correct this behavior.
The anger must give you the opportunity to learn about the cause of it. Most of traders are not able to coldly analyse the causes, It not that easy. It's a fight against oneself.
Don't be wrong. Losing a trade in trading is inevitable. It is the way of losing that is avoidable. Risking all its capital on one trade and get angry against everybody around you while it is you who accumulated mistakes, is this really honest?
You are the only responsible for your loss and you must learn from it. You must learn to lose and you must learn to lose well.
2. Runnning out on his responsabilies
When you lose a trade, the good behavior is to analyse the reason of the fail. Why did this trade go wrong ?
Some of you may be very passive on a fail. Ok I lost this one but the next one will be in success, then the next one is a fail and the next one too and the next too etc etc.
Maybe your strategy is not good. You should question yourself after each losing trade.
3. Guilt feeling
This feeling is human and totally normal !
You blame yourself when you give in to your impulsiveness, when your reasoning is wrong or when your behavior has pushed you to failure.
You had the choice to act another way. You had the choice not taking this trade or managing it another way. You know it and it is a good thing.
Now assume it ! Yes you made a mistake but how will you act to change the behavior which led to all this ? This is the most important point.
Be responsible of your choices and be responsible of your acts but don't keep blame yourself constantly. Try to improve yourself everytime, everyday.
4. Sadness
Don't let sadness affect you ! Sadness is a sign of weakness. Weakness is the synonyme of KO. It is really dificult to get up back from this feeling. Sometime it lead to depression. This is the case when a trader loses everything after a krach or bad choices. Many of you could have experienced this already. If you are in this situation, ask for help.
Sometimes it could be an humiliating situation. Be strong !
You can ask for advice if necessary. It is important for you to get out of this situation.
5. Giving up
Trading is not that easy because psychology is an important part of sucess. Being a successful trader means that you handle 3 key elements :
- Strategy (You improve it everyday)
- Discipline (You apply a strict money management, you follow it no matter what happens)
- Psychology (You are psychologically strong, you handle your emotions)
Some people cannot assume all of this. If you tried but you failed, maybe it is not for you. Some people are not able to be good in trading. Accept it, give up and move on.
---
All these natural reactions to failure can be overcome by taking a step back on the event. Put into perspective, bring nuance, change its point of view; the acceptance of failure requires a real effort whic is essential in trading
It could be very useful to understand your natural behavior when you are faced to failure in trading. All of us are facing losses, sometimes these losses can be huge when come a krach or a bad choices.
The situation in itself will not determine the reaction of the trader. It is his personality, his history facing which will determine it.
1. Anger
Being anger is a natural feeling. It is the direct consequence of a loss. But you are not anger about the loss itself but about the causes which led to this loss.
In fact, before taking this position, you knew that it was not a good idea or even a good timing maybe because:
- The lot size was too big
- There was a big data released 1 hour later
- You moved the stop loss
- You bought too high
- You sold too low
- ...
You knew it but you made it ! Why ? Not enough patience ? not enough discipline ? You need to analyse it and correct this behavior.
The anger must give you the opportunity to learn about the cause of it. Most of traders are not able to coldly analyse the causes, It not that easy. It's a fight against oneself.
Don't be wrong. Losing a trade in trading is inevitable. It is the way of losing that is avoidable. Risking all its capital on one trade and get angry against everybody around you while it is you who accumulated mistakes, is this really honest?
You are the only responsible for your loss and you must learn from it. You must learn to lose and you must learn to lose well.
2. Runnning out on his responsabilies
When you lose a trade, the good behavior is to analyse the reason of the fail. Why did this trade go wrong ?
Some of you may be very passive on a fail. Ok I lost this one but the next one will be in success, then the next one is a fail and the next one too and the next too etc etc.
Maybe your strategy is not good. You should question yourself after each losing trade.
3. Guilt feeling
This feeling is human and totally normal !
You blame yourself when you give in to your impulsiveness, when your reasoning is wrong or when your behavior has pushed you to failure.
You had the choice to act another way. You had the choice not taking this trade or managing it another way. You know it and it is a good thing.
Now assume it ! Yes you made a mistake but how will you act to change the behavior which led to all this ? This is the most important point.
Be responsible of your choices and be responsible of your acts but don't keep blame yourself constantly. Try to improve yourself everytime, everyday.
4. Sadness
Don't let sadness affect you ! Sadness is a sign of weakness. Weakness is the synonyme of KO. It is really dificult to get up back from this feeling. Sometime it lead to depression. This is the case when a trader loses everything after a krach or bad choices. Many of you could have experienced this already. If you are in this situation, ask for help.
Sometimes it could be an humiliating situation. Be strong !
You can ask for advice if necessary. It is important for you to get out of this situation.
5. Giving up
Trading is not that easy because psychology is an important part of sucess. Being a successful trader means that you handle 3 key elements :
- Strategy (You improve it everyday)
- Discipline (You apply a strict money management, you follow it no matter what happens)
- Psychology (You are psychologically strong, you handle your emotions)
Some people cannot assume all of this. If you tried but you failed, maybe it is not for you. Some people are not able to be good in trading. Accept it, give up and move on.
---
All these natural reactions to failure can be overcome by taking a step back on the event. Put into perspective, bring nuance, change its point of view; the acceptance of failure requires a real effort whic is essential in trading
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