Are you having a bad day? Has media coverage spoiled your trading plan? Perhaps you are just feeling a little off? When you encounter an unexpected setback, you can feel beaten down. You might be tempted to just stay knocked down, stuck, and unable to get back up. “I’ll never make enough winning trades to recoup my losses.” Ever have these thoughts, when you feel beaten? It’s natural, but you can’t stay down too long. You have to get back up and try again.
When a wild animal searches for water in the middle of a desert, it doesn’t wallow in self-pity when all the watering holes are dry. It keeps on searching until it finds water. Continuing the search is a matter of survival. There’s no time for worry and disappointment. When you encounter a setback, it’s wise to similarly search for new market opportunities. Think optimistically. Don’t retreat. Engage your primal instincts to survive.
Art Linkletter once said, “Things turn out best for people who make the best of the way things turn out.” You may have expected trade to turn out profitable yet lost. Some may see the loss as a sign of personal inadequacy, but the winning trader takes the loss in stride. He or she asks, was there something to learn here? Sometimes there is and sometimes there isn’t. A good trading plan can often fail for no good reason. What winning traders don’t do, though, is mull over a setback too long. They make the best of it and move on. That can mean executing the same trading plan under more favourable market conditions or it could mean searching for a new trading opportunity. Whatever is done next, stagnation is not an option.
We often feel trapped when the internal dialogue we have with ourselves is pessimistic. When we feel particularly stuck, we can talk ourselves into a rut. It starts out innocently enough. You may think, “I’m disappointed. I needed this trade to be a winner.” Your next thought, however, gets you into a bit of trouble.
You may start thinking, “I’ll never get this right. I’m just fooling myself.” Then you start remembering how your best friend warned you that you’d never make it as a trader in the long run. You then remember the other failures you’ve had in your life and the financial obligations you have this month. Soon, you’ve talked yourself into a psychological rut. All seems hopeless. When you get this way, it’s vital to get back your optimistic, fighting spirit.
How can you recapture your optimism? First, focus on the big picture. You might remind yourself, “I’ll make the profits I want someday. It may not be today. It may not be tomorrow, but if I keep at it, I’ll eventually reach my financial goals.” You might also daydream a little to improve your mood. Imagine a time in the future when market conditions are just right, and you are there enthusiastically ready to take advantage of them. And how can you get ready? Practice and experience.
The more trades you make, the more practice and experience you’ll have, and when the time comes, you can easily make a killing in the markets. You might also want to make a list of past winning trades to help you pick your spirits up when you’re down. If you read the list at the slightest sign of disappointment, you’ll be able to pick your mood up before it starts on a downward spiral. Remember the times you’ve made big wins. If you did it in the past, you can do it again.
Merely getting yourself in a good mood may not guarantee that you will suddenly return to profitability, but it will increase the odds. There’s no way you are going to find profitable market opportunities if you are pessimistic. When you are optimistic, you’ll think more creatively and freely. And this optimal mindset will give you the mental edge you need to master the markets.