Having your trading account reach a $0 balance can feel worse than a bad heartbreak. Unfortunately, this can happen to the best of us, whether you’re still beginning or considered to be more of an intermediate level trader. Some traders that blow their account give up entirely because they convince themselves that they aren’t good enough or they simply can’t bring themselves to deposit more money they might lose. However, losing your account balance doesn’t mean you should give up, as many successful traders have been there before. If you’re struggling to recover after blowing through your account balance, take a look at our tips below to keep yourself in the game.
Acceptance
Accepting the fact that you blew your account can be difficult. Some traders make excuses as to why they weren’t the problem and place blame on other factors to avoid taking a blow to their ego. Others go the opposite route and impose a lot of self-blame on themselves. They might think thoughts like “I’m not good enough” or “Maybe I should just give up”. Some never trade again because of this.
Although blowing your trading account is not ideal, it is also something that happens. It’s important to understand that trading is risky, and this is something that could happen to anyone. Once you’re able to look at the problem in a healthy light, you’ll be more prepared to take steps to deal with it.
Ask yourself What Happened
After accepting your loss, you’ll need to look into the problem to find out what actually happened. The best traders actually use the opportunity to learn from their mistakes, so you’ll want to take a detailed look at each trade you’ve taken. This step is important if you want to avoid having the same thing happen to you again.
If you were already using a trading journal to log every previous trade in detail, you can pat yourself on the back for making this step easier. If you weren’t, you’ll still need to do the best detective work you can to find the problem and come up with solutions. Maybe your trading plan is to blame, you risked too much money on each trade, or there were several different issues affecting your results.
Practice on a Demo Account
You might not want to go back to demo trading – after all, it almost feels like a demotion. Still, you shouldn’t discount the benefits of trading on a demo account. In addition to being free, demo trading can help you work on fixing the issues that previously blew your account without having to risk any more money while doing so. If you’re hesitant to get back into real trading, this step can also help ease you back into it while increasing your confidence if you get good results.
Open a New Trading Account
Sometimes, a fresh start is all you really need. After you accept your losses, get some practice, and work out what went wrong, you’ll be ready to deposit more money into your old account or maybe even open a new account with a new broker. Keep in mind that you could open a smaller account if you’re feeling apprehensive and you might even be able to find a better broker while doing so. Instead of feeling discouraged, think of it as a new beginning where you can get off to a better start. When trading on your new account, remember to keep a detailed log of your trades in a trading journal just in case you need to track your progress.
