How To Cope Psychologically The Money Loss In Trading
This article will be for those thrown up their hands after the first siphoned deposit already and decided the trading is not for them. We will not paste «viking bumper stickers» on the wound and say everything’s gonna be all right. With us you will find the real ways only, how to embrace the fact that the investments had been irrevocably lost, and to make yourself get back to trading.
Well, this may happen at any trading stage, when you just started to take the first steps in the market and run your ventire capital off on some pilot transactions.
Or if you already had some experience in the market and you just got the series of «losses» for some reasons and largely set your account to zero. It’s irrelevant when it happened and how, because you can’t get your money back anyway. And yeah – all these «pull yourself together», «take it easy», «believe, everyone may make such mistake» and «have faith in the future» – it’s all is useless, with the lump in your throat, gastritis intensified in the stomach and the wish to throw the computer out the window.
So if the primitive sentiments listed above and the similar comforts don’t work for you, then we suggest the phased loss overcoming.
First phase – release your emotions
Stop trying to abandon the anger and hurt. You want to cry-cry. You want to break something – better go to a gym and box the punch bag. Your priority is to release your emotions and live this acute phase right after loss down any way effective for you. Each of us has these things «saving» us and bringing us joy. So use them. And one more thing – don’t even think to open the trading terminal. You need to take rest of trading totally and get away to other things, which are far from the financial market.
Second phase – rethink your views to the trading world
When you really calm down, you are going to look at the trading world with new eyes and forget your attitude to it before you lost your money. It means embrace the fact that the tactics (not the strategy only, but also your behavior in the market generally) you applied doesn’t work. You need to rethink your behavior and develop a new earning tactics with a trading plan, and a choice of appropriate strategies (over 350 strategies in blog), risk management and other aspects.
If you are a total newcomer in it, then you need to pass a training course, then go deep into maze of technical analysis. In this plan we advise you to choose the most effective training program with video lessons, dictionary and selection of ready strategies related:
Third phase – find confidence in yourself again
Change your mind about the fact you are a loser will be hard. And various affirmations like «I can do it, and I get hills of money», so popular now, may not help you. You really need to get sure that you aren’t beyond work. For this, try to trade on demo account for the start. Choose a nice strategy and just trade till you start getting at least 7 profitable deals of 10. It will let you feel that you are good at trading, and check new yourself.
Sure the virtual profit on the training account can’t bring you as much joy as the real one, and yet you can train your skills and will certainly increase your future performance.
Fourth phase – replenish the deposit
To take a new risk won’t be easy neither, and even more hard – choose the investment sum. But in this case you will walk after a simple rule – don’t invest more than you are ready to lose again. For argument’s sake, imagine you lost this sum – if even the thought about is breaking your heart, then the sum shall be decreased at least to the level «All right, screw this». And for sure it shouldn’t be your last money, losing which you fail to pay the food or accommodation. It shall be the adequate sum to be traded following the money management rules and to be grown up continuously.
Fifth phase – start trading
At this phase you will feel first shivering than sweating. But take it from us, when the first transaction will be closed with profit, it «will go», your heartbeat will return to normal and you will be able already to keep trading relatively calm. Here we also recommend to start with the smallest lots of 1 dollar, and you shouldn’t bother yourself with the fact that the sum on your deposit lets you afford completing bigger transactions. Your priority now is to start and get sure you can. And this is possible with the smallest lots only, for you not to lose your mind thinking of a big loss.
These five phases shall get you back to the trading world most gently and with no consequence. The main thing is to pass each of them, and then you will be able to trade again and do it now more consciously and effectively.