Tuesday, August 11

When You fail as a trader

Failure is part and parcel of trading but till a certain limit. At first if you don't succeed, try, try again. And when you fail as a trader repeatedly fail and bust your trading account, is it's wise to continue trading ?
Long ago psychologists mapped out something called the inverted U theory of stress and performance. The impact of stress depends on the difficulty of the task you are trying to perform. If a task is relatively easy, a little bit of stressful arousal can enhance performance. But if the task is difficult, even a little bit of stressful arousal can impede performance.
When a task is difficult like trading , High stress can lead to frustration, anger, or despair.Think about the time you lost 20% of your capital in single trade. You were in Stress to recover the lost amount and get back your trading account to breakeven. This additional stress further deitroates your performance as you indulge in High Risk trade and eventually increase your loss.

Trading is hard. It requires lots of  mental energy. Trading is lot like learning to drive for the first time, you need focus and concentration.  With enough practice,

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