The Trading Mindset: Frustration Leads to Learning
Ask any successful trader and they’ll probably tell you that trading takes a lot of time, energy, dedication and grit. If you trade long enough, eventually things won’t go your way. You’ll have losing streaks and experience some pretty frustrating moments. It’s during these moments when we learn the most about ourselves as traders.
Do we give up or do we double down? That feeling of frustration can be one of the best learning opportunities in trading if you know how to channel it correctly. In this article, we will look at different ways you can tackle your frustrations as a trader and turn them into an opportunity for learning instead of roadblocks on the path to success.
Define your rules and stick to them
When you get in a losing streak, it’s easy to start making excuses for why your trading sucks. You switch from trading method to trading method, trying to find the one that will magically fix all your problems. We all do this to one extent or another, but it’s crucial that when you do you have rules in place. Rules that make sure you stay disciplined so you don’t fall back into bad habits.
If you don’t have rules in place, it’s pretty easy to get caught up in the frustration and lose sight of the bigger picture. The most important rules are your risk management rules. These are the rules that keep you from going broke. They’re the rules that tell you how much you can lose on any given trade and how much money you can afford to lose over a certain period of time.
Set a reminder or calendar alert for routine activities
One of the easiest ways to get caught up in the frustration of trading and lose track of your overall trading plan is to let the mundane get in the way. It’s easy to forget to check your indicators, forget to make your trades or overlook one of the other hundred things that can help your trading become more efficient.
If you set up reminders on your computer or phone, you can get back on track with these activities quickly and easily. If you’re feeling distracted and unproductive, check your trading to-do list. Make sure you don’t have any big gaps in your trading routine that are causing you to lose focus.
Take a break and reset
Unfortunately, bad trading habits are often developed very early in trading careers. When you’re making mistakes, it’s easy to get caught up in the frustration of it and forget how important it is to learn from your mistakes. The best way to avoid this is to take a break from trading every now and then. As long as you have your trading risk factors (discussed above) in place and are making money, it’s fine to take regular breaks from trading. These breaks can help you reset and give you the opportunity to come back to the markets with new eyes. When trading, it’s easy to get caught up in the moment of trading and forget to check your emotions. Trading breaks are a great way to make sure you keep your head and remain objective.
Think about what you’re currently doing wrong
One of the major benefits of taking trading breaks (see above) is that it gives you the time and distance needed to reflect on your trading. When you’re in the moment, it’s easy to fall into bad habits like overtrading, getting impatient, or being too greedy. Most traders have a period of time where they were green and profitable and a period of time where they were red and unprofitable. If you’re currently in a losing streak, the most recent successful periods of your trading career should be the blueprint for what you need to do to get back to where you were before.
Learn from your losing trades
Losing trades are a part of trading, but you can make sure to walk away from them as a better trader by actively working to learn from them. When you make a losing trade, make sure to ask yourself why you made that trade. What indicators or factors led you to make that decision? When you have a winning trade, you can quickly forget about it and move onto the next trade. But when you have a losing trade, you can use the opportunity to deeply analyze that trade and use it to improve your trading in the future.
Summing up
One of the best ways to tackle your frustrations as a trader is to make sure that you’re actively working to improve and change your trading in response to them. Frustration is natural in trading, but it’s up to you to harness that energy and use it as motivation to close the gap between where you are now and where you want to be in the future.
