Discover How To Get Out Of A Trading Slump

By David Hobart
16 March 2009

I have never met a successful trader that has not experienced trading slumps. Slumps confront us all. No matter how smart, talented, sensitive, intuitive, or quantitative you are; you’ll experience a slump.

At times, we require challenges or obstacles for us to overcome so that we might grow. There is a stuckness that comes with a slump. It’s like you can’t turn out of it. Every road leads you deeper into it. Every decision is the wrong one and no matter what you do, you can’t get out.

You needn’t be afraid of your slump. You will be of course, but you needn’t be. It is here that you will learn great things about yourself; so do not shy away. It is when you are in your slump that you surrender and will find your humility again.

Addiction

One of the tell tales of a slump is the consistency of losses. Often these repetitive losses are caused by addictive and destructive behaviours. This may seem obvious given that a losing streak is certainly destructive, but what is worth observing is that underneath the behaviour is a negative self concept; a pattern of thought that is reinforced by the repetitive destructive behaviour.

In some of the work that I do with traders, we are able to observe the patterns of thought that are at the core of these negative behaviours. All of these thoughts are based on beliefs, and all beliefs are self created. First we need to recognise the insanity of our original beliefs, and then replace them with beliefs that serve us well.

Surrender

Breaking any addictive cycle takes a willingness to give it up. This is difficult for most traders because we are conditioned to believe that surrendering is quitting or giving up. Giving up is something that we will never do. So we seem trapped forever in a spiral of self loathing and frustration that leads to desperation and contempt.

Surrender is nothing more than handing over your perspective. You can’t see clearly because you’re stuck in the middle of it. You need to stand above the battlefield and observe for a moment. You need to learn detachment.

To do this, imagine trading from the place where you have already lost. In a drawdown you are already in a place of discomfort; so confront that place where you are unwilling to look/go. Once you can be at peace with losing all of your trading money; getting clear on what the impact of that will look like (it may not be the money that is the source of your fear), then you are free to create.

From here, you can trade with boldness and without fear.

Practical tips

There are a number of practical tools that you can use to trade effectively out of a drawdown, however if you have not confronted your fears and have surrendered to them, then you will continue to be plagued by doubt and uncertainty throughout your trading career.

Learn first to master your emotions and you will always be able to trade out of a slump.

If you would like to find out more about David Hobart’s trading coaching and mentoring programs, please email David at dhobart@traderemotions.com.au  . 
 

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Disclaimer: The contents of www.traderemotions.com.au is general information only and in no way provides advice in a personal or general nature. David Hobart and his related entities can not be held responsible for any loss, cost or expense resulting from your activities related to the subject matter in this document and or relating to www.traderemotions.com.au

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