Out of Touch and Out of Tune: Happens to the Best Traders

The best traders have an uncanny ability to get in and out of the market at just the right moment. This is not because of luck or because of some secret system or indicator you can copy. This is because they are in-tune with the market. They’ve spent so much time learning and studying and keeping up with current events that they can read the indicators in a real-time kind of way. For most of us, especially newbies, we have to wait for the signals to fire and confirm before we get into a trade. A savvy trader in tune and in touch with the market can see the signal developing, know if it is a good or bad signal and do something about it like, hmm..  make some money.


More Than A Losing Streak

If you’ve been trading for a while you may know what I mean. You may have experienced a trade, series of trades or even a period of time in which you were in tune with the market. You understood the fundamental picture, you were tracking trends, you were watching the news, you saw your indicators set up to fire the signals you like and you knew, you knew in your bones that it was a good trade, you took and it won. Winning made you feel good, and it should, your confidence built up and you became an even better trader.

Within this period you may have experienced losses. It happens to us all, the best traders know this and use risk management to control losses. Part of what makes you successful is the ability to take losses in stride, move on and trade again. The problem comes, and this is something I’ve experienced my self, is when those losses begin to pile up. You lose more than normal, you can’t explain it, you get frustrated and try again and again and just cant’ seem to make a winning trade. Your stats deteriorate, you begin to lose winnings and maybe worse, maybe you begin to lose capital because you get frustrated and start revenge trading.


Frustration Leads To Anger, Anger Leads To The Dark Side

This is the point when many traders wash out. They either get so frustrated they wipe out their account or they just plain old give up because they decide it can’t be done… even if they were winning before the losing streak.

Does this mean you should quit, give up, throw in the towel or make one last trade with all your wad to see if you can make it all back? Hell no! This is when, hopefully before you lose too much money, you recognize that you are out of touch and take steps to amend the situation. This may mean taking a break from trading to get your head back in the game, it may mean reevaluating the data and how central bank outlook is affecting forex values or may mean dialing out your chart to the long-term and start your analysis over, from the top down.


Get Back On That Horse, Cowboy!

It does not mean you should scrap your strategy, tools or methods of analysis for a whole new system. Your system was working before, it can work again if only you can get back in sync with the market. You may add an indicator, take one away, adjust a setting or learn something new to aid in reading the ones you have but it’s not necessary to start from scratch, you don’t have to reinvent the wheel. You just need to dust yourself off, pull yourself up and get back on that horse! Start small, be careful and trade smart but trade. So long as you don’t wash out or quit you will win again.