Last week I took five trades…four of them were winners.
And while I haven’t recovered all of my April losses yet…I’m starting to find some traction.
The emotional toll of drawdowns can tear through your psyche like a hurricane.
Part of you wishes you never made the dumb mistakes in the first place. Another part wants to make up the losses right away.
However, that’s not going to help you get out of a hole.
If you find yourself in a similar situation then listen up.
I’ve discovered three powerful techniques that have helped me get back on track. And if you’re struggling with your trading right now, then I invite you to try these three adjustments…
It might be exactly what you need to get out of a funk…
Table of Contents
What They Don’t Tell You About Trading
There are so many setups, strategies, execution techniques, and risk management methods you have to learn in the beginning.
Studying…learning…and then applying it to the market.
However, what you soon find out is that there’s much more to trading than just technique.
You also have to learn how to manage your emotions.
For example, my recent drawdown is all mental.
I was trying to force winning trades and stack my profits up.
Instead of focusing on A+ setups, I was feeling FOMO, trying to make up for trades I missed.
The problem with taking subpar setups is that it takes your focus away from potentially bigger and better plays.
And if those subpar setups resulted in losses. Then you’re likely to be hesitant when a real opportunity hits because you’ll be worried about losing or getting in an even deeper hole.
It’s a slippery slope.
I’ve been trading for over 20 years, and despite $7.4 million in trading profits, I still fall victim to these mind games.
Here’s what I’ve been doing lately to get out of this funk…
Staying Conservative
I believe you should always have a big picture view of the markets. And although I don’t necessarily trade “the market” I want to know the overall trend and sentiment.
It’s earnings season…and a lot of OTCs are kind of dead.
Although we’ve seen some massive Supernovas in listed stocks.
The overall market has been choppy…and it’s hard to get a good read on where we go next.
That’s why I have been staying conservative with my plays.
I’ve been trading smaller.
This allows me to watch the plays unfold without getting overly emotional. It also gives me a chance to find my rhythm without it costing me too much.
Because I’m trading smaller I’m more focused on the setups and plays and less on the profits and losses.
More Breaking News
I’m doing this to build my confidence back up—something I teach my students to do.
Swinging For Contact
I know there’s a lot of temptation to get back those losses when you’re down. But you’re already at a heightened emotional state, and more likely to make irrational decisions.
That’s why it’s better to just rack up small wins to build your confidence back up.
While these small wins might not put a dent in your trading hole…it’s more important to have the right mindset.
When good opportunities arise…you’ll be ready to take advantage of them and not gun shy.
After you start winning more than losing…you can play for bigger moves…but right now you want to just get wins under your belt.
Don’t Be Afraid To Tinker
One of the advantages of trading smaller is you can try new stuff or tweak your current approach.
I’m doing that right now.
Tinkering with my entries and the setups I’m taking.
Now, this isn’t random. I’m reviewing my trades and mistakes, and trying to workout solutions on how to improve my results…
That’s what I mean by tinkering.
I’m still sticking to my best setups…like panic dip buys…the weekend trade….and Supernovas.
Final Note
Drawdowns suck…but they are part of trading.
The key is understanding that you’re doing something wrong and now you have to take steps to correct it.
Resist the urge to try to get back your losses right away…and start slowly working yourself back up.
If you’d like to learn more about how I’ve helped mentor over 30 of my students on their millionaire journey…then click here for the details.
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