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5 Tips for Overcoming Market Trading Losing Streaks

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As beginners at trading, we live and die by each trade and each candlestick. We’re fueled by our drive to be successful as we obsessively track the movements of every single candlestick.

The money made and lost during trades can be fascinating. We get stuck, staring at our screens, and fueled by the compulsion to win trades. However, what happens when we experience continuous trade losses?

Consider market trading to be like a sports event. You win some, and you lose some. What’s important is how you deal with these market trade losses.

Look at the Bigger Picture

Success is a formula, not a fantasy. When you look at the bigger picture, the next ten trades mean nothing. The market is volatile, always changing. It goes up and down regularly. Active traders realistically place one to two trades a day.

Success in trading is over 30 to 40 trades. If you lose five to seven trades, it’s not going to matter in the long run. Losing five trades in a row doesn’t immediately mean that you’ve failed. For all we know, you could win the next ten trades.

It’s entirely normal to experience weeks of trade losses. There’s going to be a period where you feel unstoppable, winning trades left and right. But, you’re also going to have weeks when the market acts strangely. These weeks will be challenging, as external influences are out of your control.

Let’s say you have a hundred dollars. You’re risking two dollars to make ten. You lose five trades in a row, which also means you lost ten dollars. You have the remaining $90. Then, you lose another trade, the total of your loss amounting to $12. Suddenly, that seventh trade comes, and you make ten dollars. You win your eighth trade and earn another ten. You’re now $18 positive.

It all boils down to managing risks and not losing sight of a much broader trading perspective.

Learn to Mitigate Risks

If you have bad risk management, you’re going to live and die by every single trade. If you risk 20% of your account on each trade, you’re setting yourself up for failure. If you’re risking 20, 30, or 50% of your account, you’ll have what traders call “a flash on the pan,” which means lighting grease on fire. You can double or triple or even quadruple your account very quickly, but you’ll find that this type of success burns out much faster. It’s not sustainable.

Learn how to assess risks and take them when needed. Otherwise, you won’t be able to become a successful trader. You’ll end up with more significant losses and no chances for recovery.

Double Check Your Rules

No matter how experienced we are in trading, we’ll almost always experience more than ten trade losses once every two years. We can do everything correctly and follow all of the rules, but suddenly, the market changes abruptly. We begin losing left and right, even if everything is going phenomenal.

This is the moment where you must remind yourself that success is a formula, not a fantasy. Take a look at your historical data. Is your net profit positive by your last 15 to 20 trades? If yes, you don’t have to change anything drastically. However, if you’re net negative, it’s time to reassess and make certain adjustments to your strategy.

Double-check that you’re following the rules or if you’ve accidentally changed something. Remind yourself that your strategy has worked for the last eight to ten months. Again, this is part of your success formula.

The Bottomline

Market trade losses can be disappointing. However, don’t get disheartened every time this happens. Instead, use the losses as motivation to work harder and get your money back.

Look at trading from a macro perspective. If you lose five to six trades as an active trader, this isn’t a big deal. Trade losses are only a cause for alarm if you lose 20 to 30 trades without knowing how to mitigate the risks properly.

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1 Comment

  1. An Equity Index Futures Trading Strategy – 7Trade7
    April 16, 2021 @ 12:57 pm

    […] Risk tolerance, in this case, refers to your ability to absorb losses that may result from unfavorable market trends or conditions. Your liquidity is how easily you would be able to liquidate a given position without negatively impacting your other financial obligations. Finally, your ability to raise funds is an indication of how well you will perform in terms of securing your underlying asset. […]


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