The Musings of Faith

I have to be brutally honest. My trading account has suffered this first half of the year. It’s been ugly and it has taken quite a toll on my confidence. Why should losses affect my psyche when it’s a part of the business. Because I’m human! Because I had a stellar 2010 in my trading. The past 6 months have been TOUGH.

Many tell you that you have to endure losses to be a good trader or investor. But I never did get the memo on how to turn a losing streak around. I had to figure that one out in the arena of experience. Now I’m here to tell you the secret!

TRADE THROUGH IT!

When you find yourself taking losing trade after losing trade, stop trading. But make sure you get back in the game. You cannot get better by doing nothing. So when you do stop trading, use the time to critique your trading. Be brutally honest with yourself. Look at your transaction history and recall each trade, both the winners and losers alike. Review your rules. Repeat your mantras. Listen more, talk (tweet) less.

Learn from veteran traders. With social media, you have tremendous access to traders who are willing to share their own experiences in the midst of a losing streak. I have to credit @PeterLBrandt, a 30 year veteran trader of forex and futures, for saving my trading life as I felt my confidence slipping away from me with every losing week. Read this post and this one. Great articles that couldn’t have been more on time for me.

With all that self-analysis and reflection, take another trade. Not a paper trade. A live trade in a live account with real money. You have to continue trading. Overcoming a losing streak and account drawdowns is a battle that can only be fought in the market in order to be won.