As traders, our least favourite place to be… is in drawdown. I’m sure we can all agree on that.
But the experience of drawdown doesn’t have to be negative. Here’s my advice to you when you find yourself in the red:
Realize that each loss will bring you closer to consistency. The months and weeks you suffer from drawdown can be some of the most pivotal in your entire trading career. Be thankful for the lessons, and shift into a place of gratitude… because, at the end of the day, those seeming “failures” are just inevitable bumps along the road. We need them.
Find out where you went wrong with each position. Revise your trading plan if necessary. Add in any new rules to deter you from making those same mistakes again. There is something to gain with each trade- win or loss- so make sure you’re journaling properly and continually reviewing your positions to see where you can improve. If you do this consistently over time, you’ll probably notice you’re spending less time in the red. Awareness and accountability are key. For more on this, check out my Trading MasterClass.
TAKE A BREAK
Seriously, take a week off. Step away from the charts. Give yourself permission to take some time and do something you love, with those you love. Remind yourself why you’re on this trading journey in the first place… get back to the root of why you even started. Use this time to be less intellectual- instead, allow your heart to open and get back to a place of gratitude and inspiration. Before you know it, you’ll feel ready to get back on the charts with even more enthusiasm, clarity, and confidence.
Change your state. Everything in life is psychological, so the most important thing you can do when you find yourself in a trading slump is make a change. Go outside, get moving, meditate, rebound, whatever it takes to change your state, do it! Decide that you will not sit back down at the charts until your energy levels have risen, you’re vibrating higher, and ready to tackle the market with fresh eyes. Adopting a meditation practice, not only when in drawdown, can be one of the most powerful tools a trader can use- check out our recent blog post for more on this topic.
After you’ve done 1 or all 4 of the above… you’ll be ready to get back on the charts and start kicking ass again. But just keep in mind, struggle is a healthy part of the experience. If trading were easy, everyone would do it and no one would ever fail or ever be challenged. And what’s the fun in that?
Learn to love the ups and the downs, and be okay with struggle, embrace it even…
“It is okay to be at a place of struggle. Struggle is just another word for growth. Even the most evolved beings find themselves in a place of struggle now and then. In fact, struggle is a sure sign to them that they are expanding; it is their indication of real and important progress. The only one who doesn’t struggle is the one who doesn’t grow. So if you are struggling right now, see it as a terrific sign — celebrate your struggle.” –Neale Donald Walsch
You got this. Keep pushing.