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If you have a losing streak what should you do?
You did all your technical analysis. Then you go long and the market immediately goes down - you go short and the market immediately goes up. That's 2 consecutive losses AND you are getting a little 'anxious' so you don't take the 'next' trade and it of course works. But to make the situation worse you then "chase" the entry and it immediately reverses on you - another loss AND this is 3 in a row. What should you do?
- 3 Answers
- In Trading Mindset and Psychology
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- by
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- Warren
- 328 Views
- 1 year ago
Answers
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That is an example Euphoria, I agree you do you wanna step away. Sometimes that is very hard to do because of the fraustration, but we're in this for the long run. If you catch yourself chasing or anything like that is because you've become desperate in covering your losses. What you should do is, remove that gambling style of trading letting the market play give you an adrenaline rush. Most importantly you stick to your strategy that has made you profit before, the best of traders will have their moments of losses, but what makes a trader great is the ability to remove the emotion from the trade, accept the loss and if necessary just wait till the next day. Just be honest with yourself that you were wrong and you'll live to trade another day! To be anybody looking for more literature about this please read Trading In The Zone by Mark Douglas, great book helped me plenty. |
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When things don’t work out right, you need to take a breather. Get away from the market and call it a day. |
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STEP AWAY. Without a doubt this is the hardest part of trading. Most importantly did you have a plan in place. Did you measure the risk in the trade before you pulled the trigger? What where the rules for entry and exit? Did you follow your rules and stick to the plan or did emotions get in the way of you entering & exiting the trade? This is why they call it trading, it happens and will continue to happen. You may want to scale back your position size on the next trade. Switch to Paper Trading to get some stability back and test your system. Call it a day and get your mind off of trading. The worst type of trading you can do is Revenge trading. This will usually lead to bigger losses. |
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