As a trader, you have to be very resilient because there are times when you go into a slump and even question your ability to make a trade and money but, on the other side there are also days when it’s so easy to make profits and it makes you wonder how you could ever lose money. - If you traded for any point of time, I am sure you experienced both of these feelings.
To be a real trader and make trading a profession, a profitable one that is, you have to be able to weather these ups and downs, and remain sane at the same time, hence why mindset is so important and why we decided to go with the name "primed" traders, we focus 50% of our efforts on mindset, 30% of money management and the final 20% on the system, because at the end of the day all we need to do is follow the system, once we learn it that is.
Anyway, getting back to the point of this blog post, resilience in trading and my story of today.
Today I started out the day red, it was one of the more frustrating days I had in trading, during the first 2 hours of the London session I took a bunch of losses and went down a good $4,200 for the day... I had to take a break, clearly I had to figure out what I was doing wrong? Was I in the wrong trades? trading the wrong direction? not following the process?... I had to find the cause of my losses, so I did exactly what anyone who is "failing" at any job should do, I did some reviews of my day, I went into the history tab of my cTrader platform and started checking all my trades, very quickly I realized that I was making some very basic mistakes, basic mistakes that cost me $4,200 in 2 hours!!!
Anyway, by this time I had calmed myself down and structured my head because I found the errors I was making and It wasn’t that I was in the wrong trades/assets, after all I was following the entry process and the assets were clearly moving. My problem was that in the first few trades I went a little bigger than I should have and I got stopped out on, my mindset had altered and it ultimately led me to start moving around into other trades looking for that winner, and that is because I put high expectations for my morning... which lead me to be over confident and not focus on the "big picture" of the markets. I left a lot of money on the table in the morning because of my lack of discipline and focus the first 30 to 45 minutes of the day.
Just like every trading day, there was a lot of money to be made today and I'm about to explain how I went from $4,200 loss to an overall profit of 2.5x that loss.
WHAT I DID TO BOUNCE BACK: The Power of Resilience
Clearly the first thing I did was find my mistakes, I already told you that, and this is what everyone should do when they are encountering losses... I mean you all know what the best definition of insanity is right? Doing the same thing over and over again and expecting a different result... If I kept trading how I did I would just keep losing. - It had to stop.
Here are the steps I took:
I stopped trading and reviewed my trades, I found what mistakes I was making and made a conscious decision for those mistakes to stop
I rechecked the charts, all of them, and mapped out all the important levels on assets with the highest trading volume today (WTI, USDCAD, XAUUSD, AUDUSD)
Restructured my mind and cleaned up all my charts
Now this is a powerful technique not many people will do, I actually visualized myself making trades and making back the money I had lost
Added scalping to the mix since many of the high volume assets moved plenty already
Added patience to my bigger entries and grabbed NASDAQ and WTI longs which pretty much covered my loss and made me a profit 2.5x of the loss I took
Got focused and went back into it at the pre New York market open
Long story short, I made back all the money I lost with an extra 2.5x of the loss to spare, and it’s only 17:30 local time.
The moral to todays story is: Even when you have a tough day just take a step back, breathe, and then think about what you could have done better, find your mistakes and learn from them, let them motivate you to become a better trader.
In the markets you have to be your own doctor and find out what is the right medicine for a poor trading period.
Sure you get frustrated... but in order to be successful in this business, you have to be resilient. You have to be able to bounce back from the bad days and not let it affect you in the future.
That's all I got for you, Denis over and out!