Losing streaks are a normal part of every trader’s journey, but they can be mentally and emotionally draining, especially for new traders. Having just gone through a losing streak myself, I wanted to share a few things that helped me recover and regain my confidence.
1. Trust in Your Approach
One of the most important things to remember during a losing streak is that losing trades don’t necessarily mean your strategy is flawed. In my case, I knew my approach worked. Almost all of my trades played out as I expected, but I was nervous and didn’t size appropriately. I didn’t handle the outlook of potential losses well. It wasn’t the strategy that needed fixing, but my risk management.
Tip: If your approach is proven and has worked in the past, focus on adjusting factors like position size and risk management rather than abandoning the strategy.
2. Losing Streaks Are Normal
It’s easy to panic when things aren’t going your way, but it’s important to keep in mind that most traders, even seasoned ones, go through losing streaks. I reminded myself that this is normal, and it happens to everyone at some point. Knowing this helped me stay calm and not let the losses shake my belief in my strategy.
Tip: Embrace losing streaks as part of the process. Remember that no trader wins 100% of the time, and setbacks are just temporary. Learn from them without being discouraged.
3. Only Trade What You Can Afford to Lose
I knew that I opened my live account with an amount I was comfortable losing. This gave me peace of mind and allowed me to focus on improving my trading without the fear of financial ruin. Trading with money that’s critical to your well-being puts unnecessary pressure on every decision, which leads to emotional trading and worse results.
Tip: Make sure your trading capital is an amount you can emotionally detach from. This allows you to take a logical approach to your trades, even when you face losses.
4. Seeing Trades Play Out Gave Me Confidence
Even though I faced some losses, seeing most of my trades eventually play out boosted my confidence to stick to my strategy. I was able to identify that the problem wasn’t my analysis, but rather my execution, due to poor psychological management and heavy sizing.
Tip: Review your trades objectively to see if your analysis was right, even if the trade didn’t go your way. This can help you identify where you can improve without losing faith in your overall approach.
5. Avoid External Influence
At the time, I was leaning on my mentor, Nick Shawn, who was trading under unusual circumstances due to broker issues. His actions—such as getting out of trades early—started to sway my judgment. I realized I needed to trust my own judgment and strategy, not someone else’s. This was a fantastic lesson that made me stand more on my own two feet rather than trying to rely on someone else.
Tip: It’s great to have mentors, but make sure you’re not blindly following someone else’s actions. Trust your strategy and judgment, especially if your mentor’s circumstances don’t align with yours.
Losing streaks are tough, but they don’t have to define your trading journey. By trusting your approach, staying calm, and managing risk properly, you can weather the storm and come out stronger. Btw I had tested this strategy in backtesting and forward testing on a demo account and it worked really well. Without having a clear idea of what you’re trading and that it does work, will get you into hells kitchen.
What helped you recover from your last losing streak? I’d love to hear your tips and experiences below!
I think this is true, but sometimes, there are also benefits to exploring other systems and seeing how they work for you vs the one you’re using.