Dealing With Trading Frustration

Frustration may be an occupational hazard for forex traders, as losses and even huge drawdowns can happen every now and then. This can result to self-doubt and a lack of confidence in one’s trading plan, which can then lead to overtrading or poor decision-making in an effort to make up for one’s mistakes.

Reflect on your trading experience for a moment and think of an instance wherein you felt frustrated with your performance. Were you able to think clearly with your next trades? Did you take your losses personally and start questioning if trading is really for you?

Traders are competitive by nature and it is precisely this characteristic that makes us vulnerable to being extremely frustrated with losing trades. The good news though is that it is possible to deal with this negative emotion and prevent it from affecting your trading decisions.

Trying to bounce back from a loss or climb out of a losing streak is easier said than done. For some, it’s easier to target the frustration at themselves and engage in negative self-talk. If you often find yourself in this situation, you gotta take it easy, dude! There is no point in blaming yourself for not being able to predict what could’ve easily been a black swan event. Nobody – not even the brightest economists or the hardcore number crunchers – knows for certain what the market’s next move will be. Accept the loss, pat yourself on the back for managing your risk, take note of the lessons learned and move on.

Now if you think your losing trades can often attributed to the lack of preparation, then you have to remind yourself to do your homework. As the saying goes, prevention is better than cure, which means that you are less likely to encounter frustration when you put in enough time and effort in conducting fundamental and technical analysis. Aside from that, you shouldn’t forget to plan your trades and determine your action steps for various potential market scenarios. Don’t set yourself up for frustration by throwing caution into the wind and coming up with hasty trade setups.

Other traders target their frustration at their trading strategies. What’s the point of analyzing the markets and sticking to a trade plan when the market moves randomly anyway, right?

WRONG!

The market environment may be constantly shifting and that’s the nature of the beast, but remember that consistent profitability can be attained by staying disciplined and following your tried-and-tested trading plan. If you are convinced that your current strategy is no longer appropriate, try conducting backtests or refining your approach instead of giving in to frustration and dismissing it altogether.

Keep in mind that trading is a marathon and not a sprint. There will be times when you’ll find it hard to keep up with the market and that’s okay. Just remember to pace yourself, get your timing right, and focus on proper execution.

  • Abdul

    This was a brief and concise article. The steps mentioned have really been useful to me in my little years of trading. Once again many thanks for sharing this valuable knowledge in dealing with challenging periods in trading

    • Dr. Pipslow

      Thanks for checking out my blog. Good luck and good trading!

  • Masry

    Never thought I would actually get frustrated back when I started, but here I’m, I just can’t stand to look at charts anymore contrary to times when I was counting the seconds to do so!
    Maybe I’ve done my homework or maybe not, what matters is that I’m on the verge of moving on.

    • Dr. Pipslow

      I know exactly what you mean! I think traders have experienced that kind of frustration at one point or another in their careers. What’s important is that you are able to clearly identify what’s causing your frustration and take action steps to improve. Maybe you just need a quick break or maybe a vacation to clear your thoughts?

  • paticas

    Excellent, as always!

    • Dr. Pipslow

      Thanks for the kind feedback!

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