Once is an accident, twice is a coincidence and thrice is a pattern. A viciously unbreakable pattern. This is the usual quintessential difficulty of a professional in any field, but especially true in fields that require motivation, mental presence and the ability to execute a particular talent under large amounts of stress- frequently and repeatedly.
Such is the effect of multiple losses in a trader’s life after experiencing multiple setbacks and failed trades. It is not completely surprising to become rooted in this cycle of loss that then begins to impair and affect other aspects of life, leading to further losses in an ironic cycle of reinforcement.
To put it simply, once you start to lose money repeatedly and start to feel dejected, the mind begins to become used to the concept of failure that has thus become ingrained into the unconscious. You no longer regard a loss as a surprise, but rather, you expect it. When this happens, you start to anticipate losses before they even occur and address your work without the necessary mental space and motivation needed for success.
Due to this, your mind begins to negatively reinforce the concept of defeat and prepares you for possible upcoming failures in a rigid cyclic pattern that can often be difficult to break. Delving into this idea further, you lose faith in yourself, develop negative expectations for your own results and put an undue amount of strain and pressure on yourself. It can therefore become a huge issue, specifically in the field of trading- a profession that relies heavily on the strength of the mind for success.
While discussing how to address this mental black hole, people will often tell you the same things: they will advise you to talk about it, believe in your abilities and reinforce the fact that you can succeed rather than the fact that you can only lose. However, more often than naught, these words mirror the inability of the widespread population to understand the full impact of the sting, or burn, of loss- presumably because they haven’t experienced it firsthand before.
Being in that actual position portrays a view that is very different from the preconceived notions of “it’s just a minor bump in the road”, as to you, you are aware that no matter how many times you are told to have faith in your abilities and given inspiring talks, it tends to feel impossible if you have become chained into a cycle of loss that starts to feel overwhelmingly larger than life.
You then classify the notion of breaking this unhealthy cycle as idealistic, frivolous and a common misconception of people who haven’t had to deal with losses in their own fields of professions. Of people who can conveniently rely on a stable set income every month that is unaffected by their individual, volatile and highly relative capacities. Of people who have a safety net- a regular and undeniable monthly salary, and therefore do not need to depend upon their own mental performances on a minute to minute basis, to earn their bread and butter.
You therefore push it to the back of your mind as unnecessary advice and continue alongst the path of dejection that the unbreakable cycle will continue to control your life. Whilst your view regarding these aspects may not be completely wrong, it does not mean that this cycle of loss that begins to control your profession is impossible to break.
How you handle a loss is a mirror of your own mental strength and competitiveness. The most significant aspect of your personal reaction to this cycle, is whether you consider a loss (or a string of them) an undeniable habit or the flicker of a flare that leads to your future success? The answer to that question determines your subsequent success or failure…
Naturally, a string of losses leads to depression and hurt- luckily. If it didn’t, then that would mean that your drive for success was lacking in the first place. In other words, you should look back at your failures and feel hurt, anger, insecurity and fear. The trick here however, is to not be led by these emotions that threaten to engulf you, whilst you retain a mental space that is still above (and separate) from these emotions.
This means that you are able to know when to draw the line segregating your emotions from the rationale, or what needs to be done. It also means that you realize that your failures or losses are in your own hands and with the ideal willpower, you have the potential to be change them accordingly.
Expectedly, this is easier said than done. The entire connotation of an emotion hinges upon its ability to affect the mind. Therefore, differentiating it from logic and rationale can often be difficult. However, understanding that the mind is a powerful tool, yet is influenced and dominated by the individual may make it easier to establish that humans actually do have the potential to segregate and control the mind, even in the midst of the emotional turmoil of a cycle of losses.
People will tell you that it is wrong to feel dejected after a failure- that it’s the always about looking ahead. However, the greatest lessons may sometimes come from the past. A past that provides you with the information on how to learn from your losses, make the necessary amends and move past them- beginning a new day, fresh from another. A past that also allows you to identify whether your losses result from a lack of knowledge and systemic understanding, or from emotional and situational stressors.
Perhaps you did not have the desired tools, the theoretical capacity or the ideal environmental factors to ensure your success? Or perhaps it was because you lack the focus, the ability to take risks and manage stress, or are just unsure or overly confident about your abilities? Identifying the root of the issue is extremely vital in solving said issue as it informs you about which aspect you need to focus upon, rather than your previous perception of an amalgamation of tangled failures.
In other words, the past is crucial. The doors you open when you examine your past losses with a calm and clear mind are far more than those that could have been opened whilst only thinking about the optimistic future, fruitlessly hoping that tomorrow is a better day. Hoping, itself, is dangerous- it means that you have left your success, or the lack of it, in an abstract concept not in your control, thereby solidifying the fact that you, personally, can do nothing to change it.
An extra tip: Try not to let your losses accumulate as they take a toll on your mental performance capacity. Even continuous smaller losses that result in less monetary loss than one large loss can often have a damaging impact on self-esteem and self-confidence. Therefore, if you lose once, endeavor to ensure that the next time is a win- even if it’s a small one. Even an alternative pattern of wins and losses may be better for the mind rather than having to deal with a large heap of losses that can be dauntingly difficult to overcome.
Ananyaa Sreekumar – Analyst at Tradonomix.