Your trading mojo can be a brittle thing, but what exactly does it mean, we have heard it in everyday life, someone has lost their mojo. Well to put things simply, it is another way of saying that someone has lost their confidence or their abilities to do something as well as you used to, and this is definitely relevant to forex and other forms of trading.
For any trader, there have been times where your confidence has been hit, either through a number of successive losses or even from taking a break. Being away from trading for a while and then coming back you will have no doubt forgotten something, this can also have a negative effect on your confidence and your own abilities to successfully analyse and trade.
The problem with losing your mojo is that it often escalates and continues in a downward spiel So you have had a few losses in a row, you now lose confidence in your strategy and begin to make trades that are not in line with it, these then continue to lose and put your account into the red, this further compounds the lack of confidence and can lead to either giving up or even obsessive trading without any real strategy which can increase the risk of blowing an account.
So how do we get this trading mojo back, how do we get out of the rut? The first thing that you will need to do is to take a step back, you need to be able to look at the trading that you have been doing so you can try and work out a few different things. Have you been trading differently? Are you still following the same plan and strategy? Has anything happened around the world that may have influenced the markets? Are you doing anything wrong?
Asking yourself these simple questions is a good place to start. It is part of the process of mending your confidence and will also allow you to work out whether you have changed anything giving you the opportunity to potentially change it back.
So taking a look back at the trades that you have taken. Hopefully, you should have been keeping a trading journal of the trades that you have previously made. You need to be able to look at which trades won and which ones losses, the setups for each one, and any outside influences that may have caused losses. It will take a lot of time but it will be worth it. Doing so may help you to identify certain patterns, both on the markets but also from your own behaviour. Being able to identify these will enable you to stamp them out, it may also go the other way and show that nothing that you did cause them to lose, if it is from outside sources out of your control, then it can be a way of confirming that what you are doing is actually right.
Check your stops and your take profit targets, could they be the cause of your losses, many people either set them too tight or too loose which can lead to missed profits or larger losses. Many people don’t start out with the right figures, it can take a bit of time to adjust them. They also need to be adjusted per trade, different pairs and different market conditions require different stops, so sticking them all at the same levels will no doubt lead to confusing results.
When losing, the worst thing you can do is go larger, instead, look at reducing the size of your trades, this can help ease any concerns that you have about losing more money. Knowing that any further losses will be much smaller can help you to get back into trading and to be a little more confident when trading. It is important to remember that when using smaller trade sizes, stick with them, don’t suddenly put them back up after a win or two, stick to the lower sizes until you have built your account back up to an acceptable level, at this stage you can begin to slowly increase the trade size again.
So those are a few ways to bring back your mojo and confidence, there is no doubt that you will lose it at some point, it is important to be able to recognise it and work on getting it back once it does happen to you.