Recovering From Losses During the COVID-19 Pandemic – Here’s How You Can Start Doing It
At these most trying times, losses are becoming a part of our lives. We have witnessed a massive rate of layoffs, businesses closing down, financial markets crashing, and economies collapsing with the global recession caused by the COVID-19 crisis.
We can consider uncertainty as the “new normal” now. The impact of the pandemic has changed the way we lived radically to almost 360 degrees. The sooner we accept this fact, the closer we will discover concrete steps to adapt and survive.
However, it does not mean that you are entirely out of control and that you have to keep settling for losses. If you have been trading currencies in the major global exchange, here are the ways on how can you start recovering:
Take a step back
Stop trading and allow yourself to wrap your head around the situation first. Remember that when emotion comes into play in trading, you’re setting yourself up for failure.
Losing a few trades doesn’t mean you will lose everything. Take this as a chance to pay attention to the interests that you’ve been neglecting. Make time for your breather. Maybe you can try doing something else aside from trading meanwhile. You can maybe try a new recipe, watch a new series, or play a new video game.
We even recommend that you try meditating as this can really help clear the mind. We understand that trading can be a really draining activity, especially if you’re experiencing a series of losses. That’s why you need to cleanse your mind. We find that meditation really helps.
In any case, the goal is to make sure that your mind is as far away from trading as possible. This will give you some clarity and some time to unwind. You can also take as long as you want. As long as it will take for you to recover.
Once you’re ready to dive in again, go to the next phase.
Identify the nature of loss
It is crucial to comprehend why things happen the way they did; otherwise, you’ll be making the same mistakes. In trading, there are generally two fundamental reasons why: emotional and normal loss.
Emotional loss happens when you let emotions come into play. You may have gotten too confident in your skills or set an unrealistic goal, which led you to over-trading.
Another possible cause of emotional loss is what we call FOMO or fear of missing out. It is that feeling that strikes when you see a possible trade setup and want to enter as soon as possible. When you get that feeling, your timing will be off and may cause you to enter a trade too early.
Meanwhile, a normal loss is simply statistics. You can’t win every time, and even if you are doing things right, you may still end up losing because it’s part of the probability.
The important part is to make sure that you identify what part of your analysis doesn’t work and what works so that your wins are higher than your losses.
By knowing this, you’ll be empowered to take on what needs readjustment explicitly.
Go back to your winning trades
Revisit the basic trading plans and strategies you have set for yourself that worked. Make sense of what key elements made it successful and what’s missing this time. If you can point that out, you can readily avoid the same mistakes, which led to some failure.
Likewise, compare your winning trades to your losing trades so that you’ll know why you lost. From there, you can determine what you can do to avoid the same mistake.
All these can help you recalibrate your techniques and strategies that will make the markets in your favor. Most importantly, do your best to stick to your trading plan – no matter what! Having a definite strategy helps you put the blinders on and avoid letting emotions run the game.
Here at Learn to Trade, we have our trained and expert trader coaches to help you craft a solid trading plan. If you want to learn how to recover and regain your losses, click on the “Register Now” button below to book a free online workshop with us.