Circumstances do not make the man, they reveal him.
- - James Allen - ;
Feature Article
Surviving a Slump
Despite what we might wish for, it's hard to make profits month after month. Even established hedge fund managers have months where they fail to make a profit. It's a fact of trading: There are times when profits elude even the most skilled, seasoned trader. There's little you can do but keep your hopes up, actively try to get back in tune with the markets, and patiently wait to return to profitability. Many traders, however, have trouble getting past a slump unscathed. They take it too personally. They start to believe it is entirely their fault and become upset. They are especially anxious and emotional. They can no longer think straight. Their confidence is severely shaken. At that point they find themselves in a severe psychological slump as well as an economic one. They can't trade efficiently, and start making trading errors. Matters just seem to get worse and worse. It's vital for your psychological survival to prevent a lapse in your trading success to turning into a major slump.
How can you avoid a psychological slump? First, put matters in perspective. Many traders make matters worse by holding unrealistic expectations. They believe that a skilled trader makes profits month after month, regardless of market conditions. However, even the most seasoned professional trader experiences low profitability at times. It may mean nothing about you, and even if it does, it doesn't help matters to dwell on your perceived sense of inadequacy. It is essential that you stay optimistic and don't take any of it personally. Second, it's necessary to take an active, problem solving approach. Don't passively think you are a victim. You may not be able to turn a financial slump around as quickly as you would like, but with enough effort, you can put the odds back in your favor. Actively study the markets. Try to figure out if there is something wrong with your method or whether a slight change in market conditions is all you need. Whatever you do, though, keep your mind active
Don't let an economic slump impact your mindset. It may be hard not to feel a little disappointed that you are not profitable, but if you can remain calm and optimistic, you can work through the slump and return to profitability.
Innerworth.com
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