All traders go through a bad streak now and then. The key is to keep them small and manageable. I started most days in the pit flat. My thought process was there is enough to trade during the day. Staying up all night when there was no electronic system and waiting for a call from London was just throwing the dice. Once NYMEX electronic trading system was on at night, I still felt that coming in to trade after a good night sleep was more important than what I could make staying up all night.
thumbnailHowever, there were those times where just everything I did once the opening bell rang was wrong and I would find that I dug myself into a $5,000 hole (which was my first limit when I would walk out of the pit and regroup.) There were countless times I would chip my way back to even for the day. As a trader, we know that sometimes you win , sometimes you lose and at times breaking even can be a great day.
This leads me to Trading Tip #10. If you are having a bad streak of your own, try doing what I have done countless time. Chip your way back to even and let it rest. Even before my first trade, I would write on the back of my trading Pad “(-$5000)” and then, when the bell rang, I would trade as if I was down. This way I would be more selective on my trading and I would just start chipping away. As I chipped away, I would adjust my loss numbers on the back of my pad . When I reached my breakeven point, I would call it a day and walked out up $5000. Over time, my confidence came back and I went back to my normal style of trading – as I spoke about in Trading Tip #9, which you can read (or reread) here.
Trading has always been, and will always be, a mental game. Sometimes setting yourself up into a different mental state can be a great way to protect yourself from some of those bad streaks, and it can help you be a better trader.
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