Let’s face it: many futures traders make decent profits, and then suddenly, they encounter a string of losses. Maybe the market moved unexpectedly, or the stop was taken and then moved in your direction. This can lead to frustrations – it’s a natural human emotion.
Before we get to how to handle trading frustration, if you are considering a funded futures trader program be sure to check out my Reviews of Funded Futures Trader Evaluations
Frustration when trading futures can be dangerous. And you may end up losing a significant amount of capital. If you allow emotions to take a toll on you, huge drawdowns can happen now and then. Besides that, lack of confidence or poor decision-making can compromise your day trading hurdle. This is a good example of how strengths become vulnerabilities.
The good news is that you can deal with negative emotions. To be a successful trader in the futures market, you should know the pitfalls and how to avoid them. In this post, we’ll discuss how to overcome day trading frustrations to start making profits.
Read on to learn more.
Acting out of frustrations
Once the feelings of frustration build in, a trader may act unskillfully. One can take a revenge trade or oversize a position. When we focus too much on achievement, we demand so much from ourselves.
Frustrations occur when you have unfulfilled expectations. But here is the thing – all trading opportunities do not necessarily mean that you’ll make money. After all, your success will depend on a winning strategy and establishing the correct path to deal with setbacks.
Frustrations can quickly build up when the market doesn’t work in your favor. Too many setbacks can even get you physically exhausted. This is not what is going to make you a successful trader. You should build some tolerance and remain positive in everything you do.
How to deal with day trading frustrations
Regain your composure
When you get frustrated trading futures, you should cool down quickly. This will help to minimize the damage. Don’t turn to your anger and lean on it. Take some time off, refresh, and then go back to trading with a clear mind.
Take a break
Get up from your trading desk and go outdoors. The idea is to disconnect from the surroundings.
Accept the loss
Blaming yourself on a mistake you did only worsens the problem. Getting angry isn’t helpful – it only triggers more emotions. And this is not the time for self-criticism. You don’t have to blame yourself on what would have been a swan event.
You have to be friendly with the loss and accept that the trade didn’t work your way. The truth is that some things are simply beyond your control. Even the top traders suffer some losses at some time. That said, you should spend your time looking for a solution instead of being angry due to a failed trade. Accept the loss, pat yourself on the back, and take note of the lessons learned.
Evaluate what went wrong
Since most losing trades are a result of poor preparation, you should do your homework. You don’t want to forget to plan your trades or focus on those hasty trade setups. A common mistake for novice traders is trying to make a fortune overnight. When you take a high risk, you could end up losing money if the market crashes. You need to be patient even if you’ve lost your money.
One crucial factor when trading is evaluating the risk you take. Think about the money and the market movements. Don’t take high risks that your trading account cannot handle. While using higher leverage could mean that you have a greater potential to make a profit, it increases the chances of making a loss. In other words, your risk-reward ratio should be realistic.
Be mindful of the bigger picture
Every time a trade frustrates you, look at the overall trading goal. Never let that moment of greed, fear, or anger take a toll on you. Always keep an eye on the end goal. That way, you’ll stay away from the ugly jaws of revenge trading.
Each trade should be an opportunity to learn. Some of the pertinent questions to ask are; do you trade like a sniper or wait for the perfect trade setup? Are you working to improve your learning curve or letting emotions take control? Just like other businesses, you should have a success mindset.
Don’t give up on your strategy yet
There’s no Holy Grail strategy when it comes to futures trading. Some traders often target their frustrations to the trading strategies – this is wrong. The market environment is constantly shifting, and that’s the nature of the market. If you want to be profitable, you must use a tried and tested trading plan. If you have the feeling that your strategy isn’t working anymore, make sure you back-test it.
Another thing to note is that trading is a marathon, not a sprint. Sometimes, it will be hard to keep up with the market, so you have to pace yourself. You must get the timing right and, most importantly, focus on proper execution.
Some traders don’t like to come with their strategies. Others waste their time by following other people’s trading plans. All successful futures traders have a system in place that they follow religiously. Even if you make a loss, don’t abandon your system and never allow emotions to creep in your trading.
Read and follow other successful traders
If you feel frustrated when training futures, you can read about the success stories of other traders. You’ll be surprised to learn that other people like you struggled in their careers and are now consistently profitable. This will help you reduce your mental pressure.
Don’t personalize the market
Some traders view the market as a person and start to have a personal relationship with it. When the market is uncooperative with its trading strategy, they form a hostile environment. Well, you should look at the markets objectively. Truth be told, the market won’t always match your expectations. If you keep dwelling on past mistakes, you’ll get more frustrated. The best way to keep frustrations at bay is trading in a cool manner.
Use a stop loss
Futures trading carries a certain degree of risk. One way to ensure the losses don’t get too uncomfortable levels is using a stop loss. You can use sell, buy stop, or hedge. Your goal is to keep the losses to a minimum.
Always ask yourself; how much risk can I take? If you take more than you can handle, then you should be ready for the consequences.
Be open to ideas
No matter how great you think you are as a trader, there are things you can do to improve the results. Some traders think that they know enough only to get carried by the market conditions. Be open to new ideas, and you’ll profit consistently when the market changes.
Analyze the market
Futures traders should understand the fundamental and technical analysis. If you’re a beginner, you should gain the necessary knowledge and experience. There’s also a wealth of information online to hone your skills.
Don’t let a winner become the loser
Most novice futures traders violate this rule from time to time. Let’s say the market has rewarded you by moving in your expected direction. But you’re not satisfied with the small win. Then, you trade in a big lot size, and you end up blowing your hard-earned money after the market goes against you. Do you get the picture? It’s frustrating, isn’t it?
A golden rule of thumb is never to risk more than 2% of your account size. In addition to that, you should minimize the losses and let the profits grow. Ask any experienced trader, and they will tell you the secret to trading successfully is managing their account.
Don’t chase the markets
The worst mistake you can make as a trader is to jump into a trend too late – don’t chase a moving train. To be on the safe side, you should wait patiently for the right setup. The last thing you want is to get stuck into a spiral of doom, and the markets turn against you.
The market rewards you for your discipline
When you remain disciplined, the market will reward you handsomely. The trick here is to have more pips in your account and protect your profits.
You should actively trade the first few hours of a major session
The futures market is open 24 hours a day. But that does not mean that you should stare at the charts the whole day. If you want to make money, you ought to focus on the first few hours. Pay attention to market volatility, direction, trend, and momentum. You can also choose either positional or momentum trading.
Get a mentor or coach
If you’ve been having a streak of losses, frustrations can dominate your trades. Why not work with someone who can be accountable for your trades? Often, should share your trades with a mentor to keep those lapses to a minimum. You could also join a forum where people exchange ideas.
You can share your strategies with others, but you must avoid following other people’s opinions when you execute trades.
Mental clarity, every day
Day trading futures contracts is a risky venture, so you should possess the skills to manage your trades. Before you enter a position, make sure you’re focused and clear-headed. Then, center your attention on the trading plan and visualize it.
Conclusion
The above small steps will help you keep your trading frustrations at bay. It just takes a trade or one day to blow your account when you’re not in the right state of mind. If you can’t establish mental clarity, don’t trade that day.
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Risk Disclosure:
Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
Hypothetical Performance Disclosure:
Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight.
In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.
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