We’ve all been there as traders; you lost your mojo, your groove, your zen-like state and can’t seem to get it back. In my humble opinion, psychology is the most important aspect of trading and when your emotional state changes because you are watching every day go by with loss after loss, it creates a kind of negative spiral that extends the slump even longer.

I’ve attempted to outline some of the important steps which help me from time to time. As traders, an important skill to have is self-examination in any scenario – so hopefully these steps will help get your profitability back on track.

1. Get Back to Basics

I can’t really remember which of the Rocky movies deals with this – I believe it’s Rocky 5 – In any case, he tackles the challenge of his new opponent, as well as problems in his personal life, by going back to basics. I believe firmly that going back to what has worked in the past will help you conquer your trading slump.

I always try to revisit my old trades to see what worked and what didn’t work. It’s helpful to follow people that can help you get back to basics and start hitting singles again. Once you start hitting smaller profits on your trades, your confidence gets stronger and you see the trading day more positively – which turns a negative spiral into a positive one.

Those of you who think that keeping a journal of all your trades is boring and not worth the time – then enjoy staying in your rut.

2. Trade Smaller Size

Along the lines of building confidence, it helps to reduce your normal trading size during slumps. Just for the simple fact that your emotions and fear of losses become more manageable, so you are able to have a bit wider of a stop to help you analyze the intra-day price action within the space of your stop without feeling a sense of panic.

It’s all about gaining the confidence you’ve lost – so having smaller size allows you reduce your risk and take smaller wins, both of which helps get that confidence back.

3. Examine Personal Life

See those pretty charts you look at during market hours on your large computer monitors? Well, they’re not really monitors; they’re more like mirrors which reflect your current emotional state right back at you. Did you just get into an argument with someone? Guess what, you’re probably trading angry. Have you recently experienced a loss in your family? You are probably not 100% focused on your entries/exits. Do you have some money problems? Then you are most likely trading aggressively in order to make some quick cash to alleviate those negative feelings.

I’ve personally witnessed traders/investors go into deep depression, break furniture and fly into a rage. If we are all supposed to be trading a system, with strict rules, then what does that tell you about someone’s inner personality? There is more going on inside you than you realize – so take a step back and delve in a little deeper – your trading account will thank you later.

4. Thin Out Your Watchlist

As traders and even as humans we often think that since we are losing we need to work harder and look for more opportunities, even when they don’t exist. If you diligently go back to your older trades and see what was working, hopefully you’ll notice that you had a few big winners which really padded your account. Ask yourself, “how many stocks were I watching that day”? Your answer will help you thin out your watchlist if needed and help get your Back To Basics again.

5. Examine Each Loss and Learn From It

Write your journal! Everyday, every trade, every feeling and emotion and review it. There is a reason why all the great traders recommend this – because it works.

Brett Steenbarger has a great article on the qualities of great traders and their discipline on keeping good records. Check out his article here.


Good luck everyone and don’t give up!!!