Today I’ll discuss something a lot of big-shot traders don’t like to talk about: losing.
If the word makes you want to cringe, you’re not alone. But if you don’t face your losses, you might be running away from the biggest opportunities of your life.
There’s a phrase in the trading community about being “three feet from gold.” It comes from the book “Think and Grow Rich” by Napoleon Hill. The story goes that a young man was mining for gold for several months during the Gold Rush era…
Then he got tired and quit.
He sold his equipment to a “junk man” who hired a consultant before digging. And that consultant found that the original digger gave up — just three feet away from striking gold.
I don’t want to be that kind of quitter when it comes to my trading career, and you shouldn’t either. So let’s discuss what happens when you become a losing trader and how to turn things around.
(As an Amazon Associate, we earn from qualifying purchases.)
3 Mind Shifts That Can Happen When You Keep Losing
Let’s take a closer look at three ways traders can experience a losing streak.
1. Maybe I’m A Fraud
Let’s face it … Trading’s not an easy path. Sometimes you have to talk yourself up to stay in the game. Especially if your own friends and family want to talk you out of it.
So when you hit a losing streak, it can take a toll on your mind and your self-esteem.
It’s that much worse if you’ve had any kind of success. I know from experience. The first quarter of 2022 was rough for me.
I kept digging into the red zone and it hurt. After a couple of years of consistent success, I started to doubt myself.
Did I lose my mojo? Was I a fraud? Can I still be a trading guru if I keep losing? How long will this last?
It’s pure fear talking — and you can’t listen to it.
Instead, review your winning trades. Go back to the charts. Review your trading journal. Remind yourself what it takes for you to win so you can better decide if it’s you or the market that needs to change.
2. I’ll Never Keep Up With the Big Guys
You might know that I got into trading because of my buddy Matt Monaco. His success is what inspired me to keep up the trading grind.
I thought, “Hey, I know that guy. And if he can do it, so can I.” It’s important to have a trading buddy that’s been through it. It helps you more clearly see what’s real and what’s not.
Sometimes we can be tempted to rely on trading gurus on Twitter who aren’t completely transparent. These traders love to brag about their wins, but they hide their losses.
If you believe that they’re constantly winning and never fail, it can mess with your mind as a trader. And it’s just not reality.
If you feel like you’ll never ‘keep up,’ it can help to take a time-out from fake gurus (or as I like to call them, ‘furus’).
Find yourself a community of transparent traders who are willing to share their mistakes so you can learn from them too. There’s nothing more powerful than your knowledge account. I learned that from Tim Sykes.
3. Breakthrough and Reward
Let’s circle back to the “three feet from gold” story. You often hear that 90% of traders fail. But what if a big part of that is because they quit too soon?
It’s been my experience that if you stick with something long enough, eventually something will change.
Sometimes it’s you that changes. Maybe you have a realization about something and finally see things differently.
Sometimes the outside circumstances change. If that guy kept digging, he would have struck gold. Maybe if you stay in the game, you might do the same with trading.
As a newbie trader, you have to be careful about quitting too soon. Things will get tough. But when the going gets rough, seek help! Take a trading break and start studying more. Downsize your risk when you trade. Find a mentor.
If you watch my YouTube videos, you know my favorite thing to trade is breakouts that have been trading sideways for a while.
Some people call this the ABCD pattern. Some people call it the gun pattern. Others call it a bull flag or pennant…
Whatever you wanna call it, I’m happy to say that after a long trading dry spell, I had a major breakthrough.
I discovered a new way to trade this pattern that keeps your risk level consistent but can increase the potential reward in your trade. Same risk, more potential upside? Yeah, it’s pretty sweet.
And I break down exactly how to maximize this strategy in the Small Cap Rockets chat room — check out how you can join today!