Trading Psychology: To Be In A Rut

What does it mean to be in a rut? It means being stuck doing the same thing over and over again but seeing the same results with little or no enjoyment or progress and without seeing any potential to grow.

I think everyone has been in a rut throughout their life and sometimes we get stuck in one along the road to becoming a successful trader. Every seasoned trader will tell you about how they go through periods where they “just don’t feel it” or they “lost their mojo” or they “can’t get into The Zone”.

 So how do we get out of it?

Here are four simple ways to help get yourself out:

  1. Review your records

One of the best ways you can get yourself out of a rut is to review your records. By doing this you can see what you have been doing to consistently come out on the losing end.

Therefore, keeping a trading diary is important. Not only does it help keep track of your daily trades, but also keeps you observant while making trades, as well as allowing you to keep an eye on your emotions throughout the day.

Review all your overwhelming trades, pick them apart and compare them to see where exactly you went wrong. This isn’t automatically going to change your trades overnight, but it is going to help you understand your habits and preferences that may be sabotaging your trades.

  1. Change your perspective

Sometimes it is not you, sometimes it is the market. Something that looks like it will yield good profit ends up turning and changing direction. This happens, but if you constantly find yourself off tempo with the markets you might need to broaden your scope of research.

Looking at different markets and breaking out of your current paradigm you are trading in and attempting a new tack could be what you need to break the cycle.

  1. Modify your goals

Sometimes recklessness can feel a lot like ambition. Tactics of chasing trades and averaging down comes as a result of desperation and an attempt to bully the market for profits.

If you cannot find your way out of a losing streak, the best thing to do is lower your position size and your benchmark for a successful trade. Put your ego aside and once you hit your benchmark you can begin to work your way up. Sometimes you must go back to go forward.

  1. Learn to walk away

Sometimes the best strategy is to walk away. We have discussed this in previous articles about the “3 strike rule”. 3 losing trades means you take a break and reflect on the trades, understand the emotions that came up and when you feel calm and ready go back to trade.

Persistence does pay off and will teach you to be a better trader. Keep aiming for improvement.

Ryan Mowatt, The Performance Coach

Leave A Comment