1. If you are losing money, close your position, switch off your computer and WALK OUT for some fresh air and maybe some ice-cream or mutura. You can even opt to stay out of the market for a day or two to compose yourself. Traders who keep trading while on a losing streak only end up making more losses.
2. By the same token, do not trade again after 3-4 losing trades. Traders who do this are under pressure to recoup their capital and end up ‘Revenge-Trading’ which burn them. Eventually.
3. Don’t sit in front of your computer praying to God to push the graph in the opposite direction in your favour. God is busy handling more crucial affairs. Concentrate on your trading and cut your losses immediately if the tide goes against you.
4. If you have just fought with your husband/wife/partner or you have any personal/domestic stresses, avoid trading. Your mind will be somewhere else and very soon, so will your money.
5. Avoid trading when you are hungry.
6. Never Panic! Even when you are in loss take time to check your trading strategy to see what it says. If your trading strategy says that hang on in there for 10 more pips, hang in there for 10 more pips. Charts have been known to make unbelievable U-turns just in the nick if time so STICK TO YOUR STRATEGY!
7. I don’t believe I have to tell you this but here goes – DO NOT TRADE when you are DRUNK!!
8. If the market looks too good to be true – it probably is. Do not deviate from your trading strategy because the graph looks promising and you think you can make a lot of money in a short time. If you do this you will over trade and lose even the little profits you have accrued.
9. Take a break to enjoy your profits. Go to the coast or plan a weekend away. Sitting and staring at charts for a whole month continuously will make you start seeing trading opportunities where none exist. A fresh mind is like a sharp knife – Go sharpen yours.
10. Finally, a damaged account can only be fixed by someone else. Even I cannot fix my own accounts if and when I run them into losses – I have to hand them over to someone else with a different perspective and who is not emotional about the current state of the account.
Have any more tips for the stressed trader? Please pop them in the comment section below and everyone in the forex community will be eternally grateful.
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I wish you happy and prosperous trading.