When you lose a trade and the market goes totally against your direction, you sit and think about you did and how you can improve your trading the next time.
But when your trade just touches your Stop Loss and then goes in your favor without you? Or if it falls short of your Take Profit and then meets your Stop Loss order. Frustrating, isn’t it? Don’t you want to take revenge?
As the headline suggests, you can’t take revenge on the market. It’s just too big, and it doesn’t care.
Too many traders want to compensate such very frustrating losses in one big bang. They don’t check market conditions and just enter one big trade that hopefully will erase all their losses all at once.
This “double or nothing” attitude has a huge potential for doubling your losses or leaving you with nothing. Remember that Martingale can lead to a margin call.
So what can you do?
Did you encounter such frustration that made you want to “show the market” what you can do to it? How did you cope with it?
But when your trade just touches your Stop Loss and then goes in your favor without you? Or if it falls short of your Take Profit and then meets your Stop Loss order. Frustrating, isn’t it? Don’t you want to take revenge?
As the headline suggests, you can’t take revenge on the market. It’s just too big, and it doesn’t care.
Too many traders want to compensate such very frustrating losses in one big bang. They don’t check market conditions and just enter one big trade that hopefully will erase all their losses all at once.
This “double or nothing” attitude has a huge potential for doubling your losses or leaving you with nothing. Remember that Martingale can lead to a margin call.
So what can you do?
- Take a break: Taking some time to distance yourself from the losses will calm you down and help you think straight.
- Analyze your losses: What caused your losses? Is your system wrong, or does it need tweaks? Did you trade according to your plan? Consulting a trading pal can certainly help you see the big picture.
- Return with a clean mind set: And not with vengeance. Apart from being calm, it’s important to keep your positions small. Recovering your losses will take time, probably more time than it took you to lose that money. If you follow the 2% rule, your account is likely smaller now. So, you’ll have to use smaller positions in order to limit your risk. Yes, it will take more time and more trades to recover the losses. Nevertheless, trying to overcompensate can only lead to deeper losses.
- Don’t take shortcuts: Climbing uphill can be frustrating once again, and you might tempted to enlarge your positions too quickly after a successful win or two. Unfortunately this can lead to the same pit all over again. So, it’s important to stay focused and keep climbing up slowly.
Did you encounter such frustration that made you want to “show the market” what you can do to it? How did you cope with it?
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Japanese Yen trades just shy of 157.00 versus the USD
The Japanese Yen weakens across the board after BoJ announced its policy decision. A shortlived spike in the Yen may be testament to an attempt by the Japanese authorities to intervene. US PCE Price Index shows higher-than-expected inflation but does little to impact USD/JPY which almost touches 157.00.
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.
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