“Quite some time…I been sittin it out…didn’t take no chances…was a prisoner of doubt.” – Straight On (Heart)
In a previous post, I covered some of the steps necessary to recover from deep trading wounds and what it involves to start moving past the pain and toward progress again.
Taking a big hit in your trading often sidelines you, either literally or (even worse) mentally. I know from experience! And while there are times to take a break in order to avoid doing further damage, at some point, you still have to get back on the horse and overcome those doubts.
But how do you go about doing that?
When your account and confidence have taken a sizeable reduction, there’s a ton of doubt to get past, so let’s look at 5 ways to do that.
1.) Take it down a notch. And you know exactly what I mean. When you’re starting out or starting over, you have to start small. Small enough that it’s all about the process and not the result. By doing this, you’re setting the tone for growth again, you’re respecting the market, and each trade takes on minimal significance while you’re getting back into the right habits.
2.) Get specific. By narrowing your focus to that which you should be doing, by default you can eliminate much of the fear you may be facing, as well as a lot of the trouble which comes with a fly-by-the-seat-of-your-pants style of trading. Without a game plan, you’re playing the guessing game. Understand which conditions you’re facing, and go with the strategy best-suited for those conditions.
3.) Set realistic expectations. As much as you might like to, don’t expect to make it back right away. Big expectations may be what got you in trouble to begin with, so curb your enthusiasm a bit and aim to just get the bat on the ball first. The idea is to start a foundation which can support bigger and better results, but right now it’s first things first, so look to start small.
4.) Keep risk in check. As noted in the point above, you can’t just go swinging for the fences. To avoid that, have a risk per trade amount that’s appropriate for the fresh start you’re making. And be careful with how many positions you’ll carry at once, at least until you’re back in the flow.
5.) Hit singles. Early on, the aim is to get on base and establish a rhythm of success that can be built on. By selecting high-probability setups with defined risk, you’ll increase your odds of getting into that rhythm and start marking some results in the black – just what you need the most.
** What are some other ways to get beyond fear and doubts on the road to a trading recovery? What has worked for you recently or in the past?
Trade Like a Bandit!
Producer of The Bandit Broadcast