Trading is an amazing business — especially when things are going well! It’s super easy to float on Cloud 9 when you are slamming back to back to back winners. Then comes the day that nobody enjoys. The losing day. It came out of nowhere! The day seemed like it was your ordinary, typical price action day. Then, in the matter of a tweet, the market is screaming with everyone scrambling to exit the now heavily losing position. “Great! Thanks [insert timely scapegoat here]!”


Here’s the thing, we all have losing days. Not a shock. I have written extensively about them and their toll psychologically. So the next major question arises then, how do we bounce back? How do we go from getting our teeth kicked in one day to happily meandering back into the ring as if nothing happened? The key to this comes in a few parts that can be broken down in to:


  1. Appropriate R:R
  2. Appropriate psychological exposure
  3. Trade plan adherence


Appropriate R:R comes from your overall account. When you are trading, are you ensuring you are risk is within proper account parameters? If you are swinging for the fences and have no clue what your R:R is, it’s time to take a step back and recalibrate. Read over your trade plan again! Make sure everything is up-to-date and relevant to current market.


Appropriate psychological exposure is what you can mentally take. The appropriate R:R based on math is all fine and dandy, but just because you could lose $1,000 and still be in risk tolerance doesn’t mean you can do that mentally. You need to really understand what you are ok losing. I know the first answer is “Nothing!” but really take a step back and look at your account balance. Are you ok losing $100 on this trade? Would that psychologically mess you up? It really takes a brutal internal honesty here.


Trade plan adherence is a reference to how well you followed your trade plan during the losing period. If you had a losing day while following your plan, that is totally fine! There is nothing you could have done differently and it was just probability playing out against you. Welcome to life! The other side of the coin though – if you took a losing day because you went against your trade plan, then something needs to seriously change. This type of disregard for trade plan should be seen as an aggressive coup against your personal belongings. “Off with their heads!” No remorse.


Could you imagine going in to work every day, and repeatedly ignoring everything the boss told you to do and expect to still have a job and get paid? Unless you work in Flint, MI. Water Infrastructure, good luck. It isn’t going to happen. Period. The same is true for trading. If you are going to have a trade account tomorrow, and the next day after that, you have to follow your trade plan!


If you are having difficulty following your trade plan, we have a ton of videos and blog material on the topic so make sure to check them out if you need help!


If all of the above are in the realm of ‘good territory’ for you and you are still having issues, then it’s time to really dig deep. Ask yourself why you are having problems. What emotions are you experiencing while you trade? Ask why over and over again until you get to the root. It’s amazing how much talking to yourself helps sometimes… not to sound too insane or anything…


As we always say, stay safe out there, keep those stops in play, and let the winners run! Have a great rest of your day/week. Thanks. Bye.