Forex Psychology

Keeping Your Confidence Level Up During A Slump

There will be times during your trading career when you go through a trading slump, it is inevitable and will happen to every single person who has been trading for a longer period of time. These slumps occur when the market conditions change into a scenario where you are not as comfortable with it, your strategy is not as effective in these conditions and so you make more losses than usual. Again, everyone will go through this, multiple times during their career, so it is nothing to really worry about, although we do anyway.

You often hear stories where people have had tense of profitable months in a row, even years without a losing month, then things start to change, the markets shift and that person will struggle to put more than a single winning month in a row together. This happens and it will happen to you. It can be really disheartening, stressful and this makes it incredibly easy to start blaming yourself for it, to blame yourself for what is going wrong and this makes it very easy to simply overlook the things that you are doing really well. That is simply part of human nature, to concentrate on the bed.

The problem with this sort of attitude and outlook is that it will simply make things worse. When you are performing badly at something, and someone tells you how badly you are doing, what is your reaction? For many it is to simply shrink down inside themselves and to just try and get through it without putting in much more effort, for some, they completely give up and walk away. This is what your own mind will be doing to you when you are going through one of these slums. The negative thoughts and emotions will flood in, concentrating on what is going wrong will only cement these thoughts into your mind.

This is why you need to be able to focus your mind on the positives, things were fantastic before and so they will be again, you are clearly doing things right so we need to look at that. It can be very hard to keep your confidence levels up during a slump, but we have come up with some ideas that could potentially help you to remain a little more confident during one of these slumps. They may not work for everyone, but it is certainly worth knowing that they are there to try, as you never know which one will work for you, so let’s take a look at what some of the things that you can do are.

Don’t Dwell, Act!

When you are in one of these little slumps, it is easy to simply sit there thinking about the negatives and everything that is going wrong, this is natural. You need to think about how this will help you, the short answer is that it will not. Sitting there and just thinking about the bad will only make your confidence drop even more, or even make you want to give up and quit completely. What you need to do is to take action. You should have a trading journal, use that to find out what is going wrong, and then do something about it. If you do not try and change whatever it is that is going wrong, then you will find it very hard to get out of this slump any time soon. So do not simply sit there thinking, act on it, get rid of the bad habits, and whatever else could potentially be causing the slump that you are in.

Look at What Went Well

It is important that you are able to shift your focus every now and then, shift it to look at what has been going well. This is easier said than done but it is vital to getting out of that slump that you are in. You will have had some trades that worked, take a closer look at them to see why they worked well, parts of your strategy will still be valid and so should still be used. Remember that you were able to be successful in the past, so you will be able to be again, this can help to give you a little boat to your confidence levels. So remember to think of the positives, not just the negatives when you are in this sort of situation.

Change Strategies

Sometimes these slumps are no fault of your own if your strategy works in specific conditions but the markets have now moved away from those conditions, of course, it is going to struggle to remain profitable. This is where you need to step in, it is always good practice to have a good understanding of a number of different strategies, they can then be used during different market conditions. So once a single strategy stops being effective, you can simply switch over to a more appropriate strategy without having to go into a slump at all. There will still be performance slumps, but being able to switch over should make it far easier to be able to get out of it, or to at least limit the damage of it. So if you only know one strategy, get learning another one or two.

Find a Niche

A niche is basically a specialisation, it is where you focus your trading on a single or specific aspect of it. This can help to make you an expert at a certain style of trading and helps to avoid the mismatch or blur of different strategies and ideas. You need to get an understanding of what it is that you are good at and then use that as the trademark of your trading, to have that at the centre of your strategy. Once you have it, stick with it, work with it and you may find your trading to be a little more enjoyable, even during a slump.

Talk to Others

When you are going through a slump, it is more likely that someone else will be too. Being part of a trading community will allow you to communicate with others, to get an idea of how others are doing too. It may sound bad, but knowing that others are having a difficult time too can help to build your own confidence as you know that you are not alone in your experience. You can then also use these people to generate ideas of how you can get out of this situation. Find out what they have done in the past to get through it, work out if you can do similar things to them, or make adjustments to take their ideas into account. Do not let it change your style completely, you need to remain true to your overall strategy, but there is no harm in getting ideas from others. It is also a good way to vent your frustrations.

So those are some of the things that you can do to hopefully keep your confidence during a slump. It is never a good situation to be in, people have lost a lot of money in them or even quit trading completely. Try to stick with it, look for your positives and there is absolutely no reason why you cannot get out of a slump, it may take a while, but you will get through it so keep your head up and keep on trading.