I do know this may make you cringe however strive wanting on the worst commerce you’ve ever had in your trade journal.
Evaluation the commerce setup that you simply noticed. Take into consideration what went mistaken and ask your self, “Why the heck did I ever take that commerce within the first place? What was I considering?!”
Extra importantly, “Was I even considering?!”
You most likely simply took that commerce robotically primarily based on a well-known setup. On this case, your determination was a results of your individual mind-set fairly than what the market was telling you.
Your worst commerce doesn’t even should be the one the place you’ve incurred your largest loss.
It may be a missed alternative, while you hesitated to take what may’ve been your commerce of the yr, or while you locked in income too early as a substitute of letting it experience. You may’ve wimped out due to your worry of dropping, even when the markets gave each indication that this subsequent commerce can be a winner.
Possibly you’ll take a look at your worst commerce and discover out that you simply made it while you turned completely detached to dropping that you simply ended up blindly taking one commerce after one other simply to make up in your losses.
On this case, you saved insisting that you simply had been proper and also you believed that you’ll ultimately beat the market. Do not forget that revenge trading can flip right into a nasty behavior and will lead to massive drawdowns if not corrected.
The standard response to unhealthy trades is simply shrugging them off.
Very like the reminiscence of getting rejected by crushes in highschool (not that it occurred loads to me), it’s simpler to easily push the reminiscence of a foul commerce behind our heads, and falsely reassure your self that you simply’ll put together higher subsequent time, after which transfer on to the subsequent commerce.
However that’s not sufficient!
You need to REALLY dig in into the issue and overview the nitty-gritty of your unhealthy trades. In any other case, you run the danger of repeating your errors. Regardless of how painful or discouraging the duty is, you could pressure your self to open your commerce journal and ask your self questions like:
“Why did I take the commerce?”
“Did I comply with legitimate alerts after I closed my place?”
“Is ‘The way you doin?’ actually such a foul pick-up line?”
Okay, possibly the final query is extra apt in your Saturday evening issues, however you already know what I imply!
In forcing your self to establish the feelings you felt while you made unhealthy buying and selling choices, you may be capable to see a destructive sample in your habits and take actions to right it.
Unlearning unhealthy habits and buying and selling practices will be troublesome, however they are going to actually carry you one step nearer to controlling your feelings and turning into a greater dealer.