Even the most experienced traders can sometimes find themselves financially underperforming. Occasional losses are inevitable, but if the losing streak is extending beyond measure, it’s only natural to ponder. When traders find themselves in this situation, it’s often because they’re stuck in a rut and are not sure what to do to improve. If this sounds like you, the first step is to work out the reasons why you may be underperforming, and the next step is to work out how to tackle the problem. If you’re not sure how to go about it, this article explains what you can do to improve.
Adopt a positive attitude
In the face of higher-than-affordable losses, it’s only human to react by feeling frustrated. When you’re frequently facing losses instead of profits, you may start to feel depressed or defeated, and feel like giving up. The first step on the path to improving your results is to bring this negativity to naught. You need to be positive about the situation if you’re to stand a chance of improving it. Acknowledge that your returns aren’t what you’re aiming for, but take positive steps towards achieving the improvement.
Consider changing your trading strategy
If you’re underperforming in trading, a possible reason could be that you haven’t found the right trading strategy for you. We’re all different, and each of us has our own way of trading that yields the best results. Perhaps, you just haven’t found your most effective trading strategy yet. If you’ve been relying on technical indicators on their own, for example, you might add major news to your analysis, so that you have additional groundings for your decisions. To help work out the best trading strategy for you, take a look at our article on the most common trading strategies you need to know.
Focus on practicing
One of the reasons why you’re underperforming could be because you’re not allowing enough time to practice your strategy on demo balance. This may be because you know it’s not ‘the real thing’, but practice is just as important as real trading. It will show you, which sides of your strategy you need to spend more time on refining, and achieving good results on it will give you a confidence boost. Treat practice as seriously as you would treat real trades, allowing yourself plenty of time to confirm your strategy.
Check your strategy on different time periods
Many traders rush to invest their money as soon as trading becomes profitable on demo balance. However, even the weakest strategies can sometimes appear to be profitable, often through favorable market conditions and no merits of their own. You shall know the strengths and weaknesses of your trading strategy and you might consider validating their accuracy using historical data. Scroll the chart sideways to go back in time and check your trading signals in the past to confirm your strategy.
Start with smaller investments
Only once you’ve found a reliable strategy on the demo balance, bring yourself back into real trading gradually, starting with smaller investments. Working with smaller amounts would allow you to trade away from the pressure of excessive risk and would open a possibility to reanimate your trading performance.
NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
GENERAL RISK WARNING
|CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
76% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.