3 Tips to Avoid Trader's Block

3 Tips to Avoid Trader's Block

All of us are familiar with the term writer's block. A trader's block is similar to that. It happens when a trader feels paralysed and is unable to trade usually due to the anxiety of not being able to replicate his/her success or the nervousness of repeating his/her failure. During such a condition a trader starts looking out for that one elusively perfect trade which of course does not exist. The harder they try to get out of the no-win situation, the more they will find themselves struggling in vain. In fact, it may lead to several impulsive trades which may do more harm than good. Thus, psychology is vital during trading-your purpose is to be on an even keel and work towards maintaining an emotional balance irrespective of your gains or losses. So how can you curb your emotions and control your mindset in order to avert a trader's block? Let's discuss a few steps on how you can cope with such a no-go situation:

1. Develop Iron Discipline: Trading is a highly disciplined activity. It is indeed very difficult to trade coldly without feeling any emotional upsurges. But in order to be a consistently successful trader, your wins or losses should not affect your performance. Of course, winning boosts your morale but the sooner you learn to face wins and losses with equanimity by controlling your fear or greed, the better for your trading career. Rather than fearing the market and considering it as your ally or enemy, recognise that it is a place with unlimited potential as well as risk. Trading out of fear implies that you are too obsessed with the underlying perils rather than trying to focus on the potential rewards. Fear can impair judgement. It is also counterintuitive-it can get you more of the very thing that you are trying to avoid.

2. Exploit Your Trading Edge: While you are forex trading you cannot afford to care about wins or losses, but rather about sticking to your plan and trading every valid opportunity that your trading plan gives you. Traders need to accept that the outcome of each trade is unpredictable so they should be more open to continually explore opportunities. If your system is proven and adequately tested over a great number of trades you know that you have an edge and profits will flow. Trade every valid signal so that your edge materializes. No single win or loss matters to a trading pro. If you can win even 60% of the trades you have a winning edge. Instead of focusing on making money instantly, concentrate on your performance.

3. Review Your Trading Methods: Adopt a calm approach and reassess the ABCs of trading by starting from scratch. Review your trading methodology including your entries & exits and risk management strategies. Readjust and rework your approach. Relook the charts and initiate trades based on your proven track record. Though it may seem difficult once you overcome your inertia, you should be able to reclaim your old trading self.

With time and experience, a trader lets go of his focus on winning money and redirect his energies to the one thing that he can control – the process of trading. The money will flow when the trader is confident of what he can control. A confident trader knows that he will get his share of the capital being put into play in the markets. This focus on trading is what frees you, the trader, from the tyranny of a mind attempting to regulate what it simply cannot control and enables you to do away with the debilitating trader's block.

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