6 Steps To Regain Trading Confidence
Confidence is key when you are trading binary options. You certainly do not want to be overconfident, but when you lack confidence, your actions tend to mirror your beliefs about yourself. Because you do not believe in your ability to trade well, you tend to make poor judgment calls which result in losses. As those losses pile up, you lose even more confidence, and find yourself in a vicious cycle. How can you pull yourself out of that cycle and regain the confidence which you need to succeed?
- Go back to testing
First off, stop trading live. It is not wise to continue to lose real money when you know that you need to back off from the market and take a deeper look at your trading decisions. So stop trading with real money for a little bit, and go back to demo testing, maybe even backtesting. This removes some of the pressure from you while you are learning to regain your edge. Once you have demo tested profitably again for a couple of months, you can get back to trading live. You may feel impatient about this process, but you will lose less money and therefore ultimately less time if you take the time to go back to testing.
- Diagnose the problem
You are going to need to get to the bottom of what is costing you money. This may be a very involved process which itself could involve a number of steps. Start going back over your trading journals and reviewing the decisions you have made. Look for patterns in the trades which lost money. Start going back over charts of recent trades to see if there is something you may have missed. When you can actually figure out the cause of the problem, you can fix it, and when you start seeing better results in your demo testing again, this will help to restore your lost confidence. You will then feel much better about going back to live trading.
Try to resist the urge to discard your system entirely (unless it truly is worthless; but if it was working fine before, it probably isn’t) and go back to the drawing board. The search for a perfect trading system never ends well. In fact, it never ends at all unless you decide to stop doing it. This is because there are no perfect systems and there never will be. There is only perfect execution of a good system which generates consistent results. You will always lose some trades, even with the best system. If you have a great foundation, do not throw it away because of lost confidence. Get yourself and your system to the point where you can believe in what you are doing again.
When you are working on figuring out why you are losing money, do not forget that the problem may not be technical in nature or have anything to do with your trading system. You may be losing trades because of psychological weaknesses in your trading. Maybe you have been trading when you are angry or distracted. Perhaps you have been sabotaging your success because you do not believe in yourself to begin with.
- Surround yourself with helpful people.
It is always a mistake in trading to try to go it alone. There is a very friendly community of binary options traders online, as well as traders in other markets who are usually happy to lend a hand to struggling traders. When you network with other traders, you provide yourself with several advantages. Firstly, other traders who are more experienced than you may be able to spot the reasons you are struggling faster than you can. It always helps to have a second pair of eyes looking over your charts with you to spot your mistakes. Sometimes you are just to close to things to see clearly.
Secondly, networking can put you into contact with positive people who can give you a confidence boost. When you surround yourself with positive energy and people who have focus and dedication, they reflect the best of you back at yourself. It is easier to find your own positive qualities in a conducive environment like this than it is in one where you are alone (or surrounded by negative people). You may also want to take a moment to think about your other relationships. Are you surrounding yourself with positive people online and offline, or with people who do not believe in you? Is joining a community right for you?
- Set achievable goals.
Another mistake that can cost you your confidence is setting goals that are simply not realistic. You may get down on yourself for not achieving those goals, but it is not you that is your problem—it is your unrealistic expectations. Set goals that are actually in sight so that you can get a confidence boost from achieving them. You will progress better along the learning curve if you don’t try to skip to the end of it. You should not be getting down on yourself for not making your first million dollars within a year. Be happy with a certain win percentage in your account and even a few winning trades per month. Allow your small victories to give you the confidence you need to persevere and turn them into big victories over time.
- Address unrelated issues which may be impacting your trading.
Shattered confidence sometimes has another source outside your trading. Loss of confidence in other areas of your life can easily impact your performance when you sit down to trade binary options. Think about other areas of your life: work, relationships, family, other personal projects. Is there another area of life where you have been dealing with failure or low self-esteem? If so, making improvements there could ultimately help you get back to trading confidently. When you restore confidence in one area of your life, you generally experience improvements in all areas.
- Make smart decisions.
Another reason that confidence can fall apart is bad decision-making. Have you been compromising on your trading decisions and making poor choices while trading? Have you been taking trades you should have avoided, or breaking your money management rules? When you make decisions which are not intelligent or disciplined, you can easily lose confidence in yourself because you know that you do not deserve to succeed through making the wrong choices. When however you make the right choices and trading intelligently, you will know that you are deserving of success. Trade with integrity, focus and purpose, and watch your self-esteem grow by leaps and bounds.
All of the choices you make ultimately end up becoming a part of your identity and self-perception. When you make smart, healthy choices and surround yourself with positive people, you are making choices which feed into a positive self-image. When you respect and believe in yourself and feel you deserve to succeed, you are far more likely to keep on making good decisions that generate success. Everybody goes through rough patches now and again with self respect and trading. So take some time to rebuild your confidence and self esteem, and then get back to trading!
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