How to prevent Freak Out Moments in Forex

Updated: Feb 23, 2019

You have just lost your seventh trade in a row. Once again, your trading selections have gone against you and the only thing you have to exhibit for your efforts is your account reducing in size.

Let’s imagine this has happened over the last 15 days – you feel at an entire failure as to what you expected to do. There doesn’t seem to be an ending for your losing streak.

You start questioning your trading – maybe even your strategy itself. In no time, you are thinking of leaving it all behind and moving forward to something else.

That will be a freak out moment.

Every single trader will experience a freak out moment at some point or another. This is common between most occupations – however in trading it is different.

Most investors are not trading for a company – they are trading for themselves.

This simply leaves you more vulnerable to freak out instances which in turn makes them a bigger threat to traders. You might not exactly have colleagues to express your concerns to or a mentor to get words of advice from.

As a result, it is crucial for the independent trader to understand why these instances happen and the way to deal with them.

But in this blog, I am actually heading to explain how you can avoid freak out times, like the one above, using some quite simple steps.

The Greater Picture

With regards to trading, one of the toughest things for new traders to really grasp is context. Using our earlier example, let’s have a look at those several lost trades.

Those trades happened over the course of 15 days which seems like quite a long time – especially when it is 15 days of negative experiences.

However, those 15 days are a drop in the bucket when it comes to the greater picture.

Trading is much more like a race than a sprint. Just what is several lost trades when compared to a year in which you will take 200 trades?

Typically the difficult part for the majority of traders is realizing that, in the greater picture, a losing streak will have a minor impact.

Experienced traders have way less freak out instances because they have literally traded 100's or thousands of times.

Even a losing streak of 10 {certainly will not kick-start a freak out instant for an experienced trader. These traders are mentally well prepared because they know how to deal with the situation versus an inexperienced trader that often doesn’t.

These people have traded long enough to know better.

Trading Psychology

Your own psychology is the biggest reason why you have freak out moments.

Consider the state your mind will be in if you have only experienced losses over 15 days. You are heading to have a very negative state of mind if you don’t have a tendency to your psychology.

Let us face it, nobody {wants to lose and nobody especially likes to lose money.

That is why the swap from demo trading to live trading is one of the most difficult transitions traders ever make.

Tangible consequences suddenly come into play and this has a huge impact on your state of mind.

This specific carries over with your freak out moments. If you do not actively practice and build up your mental psychology you will be mentally weaker.

A trader need to practice keeping your mental state in a calm manner when you are trading. That is a lot harder to do than it sounds. In fact it is why the majority of new traders quit.

Negative thoughts pile up and actually influence your judgments into a progressively more negative way.

They can ruin your trading career if you are not careful.

So do not ignore the value of trading psychology! A strong mind is the greatest defense against freak out moments, but it is only throughout your own hard work that can get you there.

Self Control Equals Freedom

This specific follows on nicely from your trading psychology as practicing discipline.

In case your trading routine is erratic and inconsistent, you come with an unstable base that your trading depends on. This instability will lead to more mistakes and a higher chance of having freak out moments.

Discipline equals freedom in this sense.

When you are diligent with your trading journal, if you constantly check your charts everyday, you will build a first step toward self-confidence and stability from where to trade.

Unexpected events or big losses will most likely result in freak out moments. But if you are disciplined with your trading you can expect the unexpected.

So if you have 5 minutes to spare make use of it to check the financial reports. Be disciplined with yourself and keep your support and resistance areas updated.

Being prepared is heading to go a long way in protecting against yourself from having freak out moments. Self-reliance will be a major factor when it comes to trading!

Evaluate Your Results

Talking about self-reliance – if you are constant with your trading journal you have a treasure trove of data and results that you can look back on!

The whole goal of trading journals is to allow you to evaluate your results and make adjustments to your trading.

Part of keeping away from freak out times is examining your trading journal. A trader can look at where you need to improve, but just as importantly where you are succeeding.

Inside relation to your trading psychology, it is important that you don’t concentrate totally on the downsides of your trading. This particularly will create an atmosphere where doubt and freak outs are more likely to happen.

By examining your results you retain the context of your trading at hand.

This is a essential step for each and every trader. Sadly, most traders don’t keep a proper journal until after their first 12 months of trading.

Don’t make that mistake!

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