Frustrations in Trading & How to Deal with It

Frustration, the kind of feeling when nothing quite works out the way you thought it would. We've all experienced it when it comes to trading. The financial markets at any given time are in constant flow of motion, adapting to new information as it comes along. One moment feelings of elation and recklessness bound the markets, the next doom and gloom as if the world were coming to an end.

But how does this impact on your trading? Maybe you took the view the market was going to trend upwards and instead turned down. One trade after the other, your stop losses keep getting hit. The more times you lose the more resentment and anger build up inside you until you finally throw in the towel out of pure frustration left only with a drawdown in capital, a string of losses and a bruised ego.  

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Sound familiar?  The fact is most traders at some time or another are going to feel this way. It’s perfectly normal to feel like this from time to time; the markets never work in perfect tandem with your trading plan.

Obviously the scenario above is not the only way in which frustration may enter your trading, but the lesson here is to identify what makes you most frustrated in your trading and then deal with it in a constructive manner.  

I want to share one of my experiences with you:

Beginning of January, feeling fresh from the holidays I pulled up some charts to see if there were any potential setups presenting themselves. Rationalizing that it was still the beginning of January and that not many traders were back from the holidays, I put the lack of any setups down to that. However the problem came in when after 2-3 weeks of not seeing anything my mind started to wonder. This is when my frustration began to set in. Negative thoughts were flooding my mind.

Was I losing my touch? Was I being lazy? Why can’t I see anything? I want to trade, but there were no signals. Maybe I could force a trade, but that would go against my rules and possibly damage my capital.

I had 2 options on how to deal with this and I’ll explain both:

The first is to allow myself to absorb all the negative self-talk and take a trade although I was aware that it was not high probability. By doing this I would be allowing my emotions to take control of my trading which could have dire consequences. Emotions are destructive, devious and damaging when they get drawn into the trading process.

The second option would be to step back, identify the feeling of frustration and then put a rational explanation to it. Most times you find when you frustrated you tend to see things worse than what they are, by taking a step back you see the picture clearer and are in a better position to make the right decision.

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I chose to follow the second option from experience with dealing in the first option. If ever you get the feeling of frustration crowding your mind, take a step back. Think about the situation and cool down your emotions and when you enter back into the realm of decision making you can rest sound knowing that the decision you made was well thought through. Trading can be very tough mentally so you need to be aware of your own emotions before you understand the emotions of the market.

If you would like to contact me you can through my email at cadetrader@gmail or if you wish to follow me on twitter and get the latest updates of news, interesting commentary and general trends in the market, my twitter handle is @CadeTradeR if you follow this link it’ll take you directly to my twitter timeline:https://twitter.com/CadeTradeR