Overcoming a Trading Burnout

Originally posted on: August 31, 2012

Forex trading may seem like an easy job to outsiders. To them, all a forex trader does is sit in front of a computer, read a bunch of news articles, put up some lines on a chart, and then money will magically appear.

But every trader will tell you that this is not the case. Every single time a trader goes on his trading platform, he knows that he will be exposed to a variety of stressful situations. This makes forex traders very susceptible to what I call “mental burnout.” This pertains to the collapse of the mind due to overwork or stress.

Mental burnout can be triggered many factors like overtrading, extreme market conditions, unrealistic expectations, and of course, losses.

Mental burnout is indeed a terrible thing as it interferes greatly with trading performance. If you want to find out whether you are undergoing or about to undergo a mental burnout, then keep reading on!

The first thing you must understand about mental burnout is that, typically, there is not one single event that can trigger it. It is gradual process that happens over a long period of time. Burnout is also very broad as it doesn’t only affect one part of your life. It can manifest itself in school, at work, in your relationships, and sometimes even affect the burnout victim physically.

Burnout can sneak up on you without notice, so it’s very important to pay attention to the early warning signs. Below are a few questions for you to ask to see if you’re about to burnout or are already burning out. The more times you answer “yes,” the more likely you are about to experience a burnout:

  • Are you beginning to question why you should care about your trade rules?
  • Even with proper diet and fitness habits, are you having frequent migraines, muscle aches, and sickness?
  • Do you feel self-doubt?
  • Do you feel helpless, trapped, and unmotivated?
  • Do you hold off in closing a losing trade even though you know it’s already doomed anyway?
  • Have you started to eat more, take drugs, or consume more alcohol than usual?
  • Do you feel angry towards others for the smallest reasons?

If you feel that these warning signs apply to you, here are some tips that might help you recover from a trading burnout:

1. Take it easy

When you’re feeling more stressed about your trading than usual, you run the risk of making things worse if you force yourself to trade more and work harder. Taking a moment to unwind could help you clear your mind and make it easier for you to focus later on.

2. Ask for help

More often than not, trying to overcome a burnout on your own can result in twice the pressure you already feel. In this case, there’s nothing wrong with consulting a friend or even a psychological counselor. After all, it’s possible that burnout might be a product of a different concern other than trading and it’d be best to isolate which problem you really need to work on.

3. Take control

One of the major causes of burnout is the perceived loss of control over a situation, which is something that traders could be prone to given the market’s dynamic nature. When you feel this kind of anxiety while trading, try to regain control by setting simpler goals. These can be in the form of managing your time wisely, updating your trade journal regularly, or developing a trading plan and sticking to it.

Overcoming a burnout is definitely easier said than done. But, as the saying goes, prevention is better than cure. Here are some ways through which you can avoid getting burned out in the future:

1. Remember the warning signs of a burnout

Simply go through the list of questions that I posted above and make sure to take it easy with your trading when you answer “yes” more than a couple of times. Also, take note of the usual factors that trigger a burnout for you and try to work your way around those problems.

2. Recall the feeling when you first started trading

Do you remember that light bulb moment when you first understood how fundamental and technical analysis made sense? Did you feel giddy when you placed your very first trade? Use that excitement you felt when you first started trading to renew your enthusiasm for the craft. This way, you’d be able to focus more on the positive aspects and less on the stressful ones.

3. Find a trading buddy

If John Bennett was able to find a Thunder Buddy in his old teddy bear Ted, you should find your very own Thunder Buddy when it comes to trading too! But instead of holding hands and cursing the forex market, share your trading thoughts with your buddy instead. He might be able to help you determine your common mistakes and correct them, allowing you to avoid stress from these problems down the line.

4. Pamper yourself

By this, I don’t exactly mean having a relaxing massage or getting your nails done. But hey, if it works for Big Pippin, it might work for you also!

We all have our own ways of unwinding – be it through a beach vacation or a few rounds of paintball – so it’s important to know what does the trick for you and then do it! As much as I know you love trading, make sure that you also do something else that you enjoy regularly to avoid the dreaded burnout.

Got any other tips to avoid or recover from a burnout? Just let us know by posting through the comment box below!


  • wirabayu06

    Back to the real time ^.^…
    I just continue to browse ur previous post. Now at May 2011. Ur post will not eaten by the time Dr.Pipslow.. And becoz ur post, i can manage my emotion and have more relaxed now.. Thank u ^.^

    • Dr. Pipslow

      You’re welcome… glad to hear I can help :)

  • JJ6845616

    I have been studying different systems and strategies since the last 2 months but when i backtest them manually no one seems to work.In fact i tried 2 or 3 systems too but all i got was a loss at the end of month.What is happening to me?Is it something wrong with me or the forex is an sort of organized poker.The worst thing is that i already have a 1.5 years forex trading experience.

    • Dr. Pipslow

      Some of the greatest traders and fund managers of today took 10+ years before they became successful enough to beat the markets over time. (Ray Dalio, Warren Buffett, Salem Abraham, Jerry Parker, etc). Even with 1.5 years under your belt, you’re still a FX noob. Keep working hard and focus on building processes, not profits. :)

    • shivasai19

      It’s fifth year for me still haven’t made a buck, what should I say…..never quit the war in middle

      • Dr. Pipslow

        Persistence pays off, as long as you practice smartly. :)

  • JJ6845616

    I am feeling much stress now a days..I am helpless and trapped.I have tried many systems and strategies but no one seems to work well.In fact i wanna cry and know what the forex traders too.I don’t blame my mental psychology for this i stick with the rules of my system but in the end of month i get a small loss.Than i think”who is gonna pay for my work hard at the end of month” and the answer is always “no one would”.I am losing capital month by month and it seems that if the situation continues i am gonna blow up my account in the upcoming months.What should i do doctor?

    • shivasai19

      Interested to know what doc would suggest. I suggest you better take a complete break from trading- especially when you have that trapped feeling. Don’t read or do anything related to forex. Then set your demo account balance to the same amount as your original account balance. Pick only one or two strategies that you are comfortable with. Start trading the demo account. Set a target amount to reach. once you reach there then switch to original account.

      • JJ6845616

        Thanks Shivasi i was thinking in the same way but don’t u think so that these are the summer days so almost all of the traders were hurt badly because the markets were choppier!

        • shivasai19

          Not sure about others, but yes my account did move up and down quite a bit in recent months. Erased my gains a bit. But the 1% risk management rule saved my day. These are acceptable losses to me for now. I have seen similar pattern before, prolonged periods of fluctuations in account balances.

          Accept the fact that this situation will repeat in future, look at your journal now and think how you can filter out some of the bad trades you did. All the best

          • zmolokoz

            Hi JJ6845616, just to share what might help. Be patient, stick to 1% risk management and have confidence in your system.

  • Kava Powder

    A much needed input. Thanks.

    • Dr. Pipslow

      You’re welcome Kava!