After closing a winning or losing trade, a trader can experience what today is commonly known as a “trader’s block”. In simple words, it refers to the condition when a trader feels blocked and finds very (if not impossible) to open new traders or close the ones you’ve already opened.
There are two reasons behind this conditions:
A trader has closed a winning position and now fears he/she would not be able to replicate same positive results in the future.
A trader has closed a losing position and now fears he/she would replicate same negative results in the future.
And here are three steps to overcome it:
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Accept you have a problem
The same logic behind any addiction treatment. Recognition that there is a problem goes always first. Otherwise, it would be impossible to move forward.
Once you understand the problem, try breaking it through internally. Think about the emotions that are keeping you from moving on with your trading activity. Put some rational thinking into it.
Do not think that time will help you overcome it. Fears are worse than viruses. If they get into your mind, they quickly expand and take control over you (and your trading account).
Trading assessment
No, this step does not apply only to those who lost money in the past. Let’s see. If you experienced a negative result and that’s weighing on your sentiment, then you should give a step aside of the mud and look over all your past trades. Identify what went wrong and how you can avoid such situations in the future. Losing some cash is absolutely normal in this business.
On the other hand, if you are fearing of not being able to perform well in the future… seriously? You have already done a great job. Revise your last trade and see why things went right for you and how you can turn that into a constant dynamic for your account.
Stick to your trading system and strategy
Constancy serves as a good protection too. So next time you consider opening a new trade, think whether it works well for your system and strategy.