The Mental Game

The past few weeks have been discouraging for me.  The mental game with trading can be tough and it has been getting the best of me for a few weeks.

If you follow me on twitter, you will know that last week I had a big $5K loss along with another loss last month.   Those losses were due to stubbornness. I did not want to end my winning streak so I broke my rules, got stubborn, and got burned as a result.  I am convinced that stubbornness is the number one thing that kills traders dreams becoming successful day traders.  However, I have noticed that these two losses have really shaken my mental game and has changed how I am approaching trades.

Since the losses, I have been subtly changing the way I trade.  I have not been taking profits gradually like I usually do.  Instead, I have been holding on to the full size hoping for a big win. This has been causing me to stop out at breakeven more times than I can count with no profits to show for the trade.  I have also been sizing in bigger and sooner hoping for a big win.  This has increased my risk level to an inappropriate amount and makes me trade nervous.  I have also been very hesitant to even pull the trigger on plays for fear of the trade not working out.  This has caused me to miss great trades.  And the worst part, I have been unsatisfied with my winning days because they are not big enough. They don’t make back my losses.

I am grateful that I am realizing these issues with my mental game.  It’s odd because these changes have been ever so subtle.  At first, I just wanted to blame it all on the fact that there have been no quality set ups.  It is true that there have been fewer quality setups lately, but there have been good plays out there as well.  Then I started to realize that my poor trading performance was due to the bigger issue with my mental game.  This has greatly effective my P&L.  I think I am seeing what is truly meant when traders use the term “revenge trading.”

I don’t know if there is a quick fix to these issues.  In my opinion, the fix starts with me recognizing the issues then gradually working on them.  I need to put the losses behind me and focus on consistent and quality trading.  I have proven that I can be relentless at fixing my weaknesses and I need to use that determination to my advantage here.

I truly LOVE trading and count my blessings every day that I get to try my hand at making a career our of it!  I will focus on fixing my mental game so I can get back to the consistency I have been trading with all year.