The Secret to Getting Over Trader’s Block

Ever heard the term ‘trader’s block’? If not, there’s no doubt that you’ve heard the term writer’s block at some point in your life. You know, the condition where an author loses its inspiration and the ability to produce and write any new work?

Writer’s blocks vary in intensity and whilst some last a few minutes or hours, there are some extreme cases out there where the writer is experiencing writer’s block for YEARS! And the truth is that it can happen to the best of writers out there, like J.K. Rowling for example. She was open about her struggle with writer’s block when she was writing Harry Potter and the Chamber of Secrets. She said she was unable to write for over five weeks!

But it’s not just authors and writers that can suffer this. It can crawl up on anybody in different shapes and forms. And we are here to explore and help you get over a trader block. Don’t even think that it will not happen to you – it happens to the best and most profitable traders, so at the same point, you come back to this post and try to get some ideas to get over your trading block.

traders block, trading psychology

Forex Trader’s Block

So how is this all relevant to forex trading? Well, just like writers who experience writer’s block, traders get these blocks too. Even the most profitable traders out there face a trader’s block at some point in their trading career that lasts days, weeks, or even months.

Forex traders’ blocks normally occur after a significant win or a significant loss and can be triggered by various reasons. To mention some, most traders feel like they will never be able to replicate their last successful trade and past performance in the market, or they fear another huge loss of money when entering a trade. 

So, how do you overcome trader’s block? How do you get back to smart investment decision-making in your forex trading? And how do you forget the losses in your previous trades and the horrible past performance and move on to a situation where you can make a profit from trading?

“Going on tilt”

If you ever played poker, you know what tilt is. It is a bad state of mind that leads a poker player to make lots of mistakes. In trading, you’ll hear this term quite often – “going on tilt”.

The truth is, when the trader’s block crawls upon you, you’ll feel paralyzed, riddled with fear, and unable to act and find trades in the market. You’ll find yourself sitting there waiting for the perfect forex or stock trade that doesn’t exist. Just like an author gets into a writer’s block and loses the ability to write and produce content, you’ll lose the ability to ignore the risk in trading and find profitable trades when analyzing currency pairs, stocks, or any other financial instrument. 

If this ever happens to you, it’s important you remember that you’re not alone and there are lots of other traders out there going through the same thing, including very successful and profitable traders. Don’t automatically think the worst. Instead, take some time for yourself, relax, and try not to let it worry you too much. It is part of trading and most investors have to deal with this phenomenon and overcome trader’s black at some point in their trading career.

overcome traders block, trading psychology

Tips on Dealing with Trader’s Block in Your Forex Trading

Before we dive into the best ways of dealing with the block, let me quickly mention what NOT to do when you get into a trading block. The single, most important thing that you should avoid if you’re dealing with the trader’s block is to force it. This will cause more harm than benefit to your trading strategy.

My advice is, don’t place trades just for the sake of it. Yes, technically it would mean you are trading again but really, you’d just be gambling, and eventually, you will lose money. Instead, wait. Mental strength is a huge part of becoming an investing and trading expert and is essential to your success in forex trading. You cannot trade any financial security in the market if you are not 100% sure your mind is clear and focused on trading. Simple as that.

This kind of behavior will only cause more harm and lead you to more losses. Now that we got the worst-case scenario out of the way, let’s talk solutions.

Take a Step Back and Relax

Seriously, just take a breather. It might be just what you need! It’s the wrong time to trade the markets. So, switch the computer off and take some time for yourself. Do the things you like to do and forget your minor failure as a trader. It doesn’t matter whether it is taking a relaxing bath, doing a puzzle, taking a trading course, visiting a website you like, playing video games, or just taking a nap. In extreme cases, some traders even take a week off if they are unable to get their trading confidence back.

You know what works best for you to clear your mind. The goal is to distract yourself from trading!

Start Over

Sometimes the best thing to do is to reset and restart. Every trading day is a new learning day.

Perhaps you need a new trading strategy? Or maybe your old forex strategy needs a refresh? Maybe you need to sharpen your technical analysis skills and read the charts or forget about your ex-girlfriend. Whichever trigger it may be, sometimes re-doing and re-learning is the right way to go on about things. Some traders feel like they always need to increase their knowledge, which helps them to get into trading without fear.

Really, just take enough time to review your strategy in its entirety. And wait for the right moment to go back to the trading world. If needed, start with a demo account and practice with virtual money. Try new things and ideas to find trades in the market. And if you feel like you can make it better? Adjust it based on recent experience. It will help you get your confidence back and remind you of things you have forgotten about.

Educate Yourself and Listen to Other Traders

Another thing that is crucial to get through a trader’s block is to read, learn and listen to stories from other traders who faced the same situation. In other words, broaden your horizons. For example, many athletes who had an injury that kept them out of the court for a period of time said the time off the court helped them visualize the game in a better way. Consequently, they came better than ever.

The same process could happen to any trader. By using the time when you are out of the market, you can learn about the supply and demand, how forex brokers work, what affects the price of a stock or a currency pair, the psychology in trading and when is the right time to buy and sell securities. You can also focus on a new technical analysis indicator or learn more about the most basic indicators like support and resistance levels, moving average, RSI, etc. There are also lots of podcasts of traders who share ideas and tell their insights about the market.

It might sound like it’s not the most important thing to keep your trading routine going, but it will have a huge impact on how you perceive trading and how you deal with your trading block.

Slowly Dip Your Feet in the Water

Now that you’ve cleared your mind and gone back to the basics, it’s time to look at the trading charts again and follow the price action in the forex market. Spend some time analyzing the market, or a certain company and remember all the steps in your trading plan and strategy.

Once you’re confident you see a trading opportunity, take it! Push yourself to place that trade and make a profit. Even if it’s a small profit, you should take it! Making small profits can build your confidence as a trader again. If necessary, take safe trades by entering a trade for a few minutes and try to slowly increase the amount of capital in your trading account. This is the first step to overcome traders’ black and the fear of trading and making money again.

Decrease Your Trading Volume

When things are going in the wrong way and you are facing a trader’s block, you need to decrease your trading volume. So, take small positions and trade smaller. Now it’s not the time to make huge profits and increase the capital you have in your account. Instead, you simply need to rebuild your confidence and learn how to better manage the risk in each trade. Take small trades and get in and out of positions several times just to get the feel of the market again. That’s what you need to do.

Final Thoughts

The bottom line, facing a trader’s block may be hard at first but eventually, these small steps will make a big difference in the way you approach trading and will help you overcome trader’s block in a short term period. Clearly, there’s a substantial risk that you’ll lose money in the forex market after you lose your confidence and you constantly think about the losses in your recent experience.

But remember, once you get a routine going, much like J.K. Rowling who struggled with writer’s block – you will be right back to your good ol’ self! If you are a good trader that knows how to read the markets and find trades, you will overcome this challenging period of a trader’s block and push yourself towards your trading goals.