trading

Bouncing back from a financial setback

in Marketing on 7th July 2020

They say that when you fall off a horse, the best thing you can do is jump right back into the saddle.

You will, at times, suffer losses and setbacks in your trading – it is inevitable. Even the sharpest minds can fall victim to what are incredibly volatile market conditions, as has been the case in 2020.

But, and to offer up another relevant cliché, winners win, and losers learn. As long as you analyze every trading loss, understand what went wrong and what you could do better next time, then you are already on the way to bouncing back better and stronger than ever.

Here are some other tips that will help you on that journey:

No fear, no loathing

The biggest problem that arises from a loss is not financial – it’s psychological.

So many new traders buckle after suffering their first reversal, and typically it’s because they lack the experience and nous to know that, hey, ‘losing’ is at times inevitable.

As soon as you let fear into your mindset, that can be curtains for your trading career. Suddenly you are not acting on positive expectancy trades, missing opportunities, and cutting your losses at the first sign of danger.

The truth is that trading dividend stocks or commodities like gold are less psychologically-demanding than, say, the forex market or stocks and shares. But in all cases, fear will paralyze traders who should, realistically, be acting upon their impulses and instincts. 

Getting back to basics

You can wallow in self-pity after a trading loss or get straight back to the grind.

When you suffer a jarring reversal, it makes sense to conduct your post-mortem before quickly moving on. Getting back to basics will help to clear your mind.

What’s your trading strategy? What’s your plan of attack for entering and exiting a market? When will you close your position? What will you set your stop-loss and take profit at? 

Get all of these objectives clear in your mind, so that your trading regains that rhythmic, robotic quality. And remember to do your homework – researching the latest online trading news will put you in the best position to implement your newly-reinforced strategies. 

Practice makes perfect

If you are feeling low on confidence, there is no harm in setting your trading account to practice mode for a while.

Take the time to work on your strategy without risk, test out new ideas, and see if you can improve your success rate and your ROI with paper trading before taking the plunge with your hard-earned cash. 

The repetition from a string of successful trades will help to build your confidence and belief in your systems once more.

Be positive, be happy

Low mood and low confidence are not exactly vehicles for success in trading.

You will be told not to trade when ‘tilting’ or emotional by all and sundry in the industry, and it is a simple fact that emotion-led trading is an absolute no-no.

Remember, the market is NOT out to get you, and you CAN be successful in trading. The path to glory is rarely without obstacles, so be happy, take your lessons on the chin and put yourself in the best possible position to thrive. 

Categories: Marketing

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