“When should I quit trading for good?”
If you’re a struggling trader, I’m sure this question has been in the periphery of your mind at some point.
Well, there’s no right or wrong answer to this question. It’s deeply personal. Some people end up quitting because of the constant emotional battles (it’s in the job description); some others quit because of their lack of progress. Some quit because of losses. Simply stated, at some point, people need a change of scenery. That’s a valid reason.
But in this field, there is tremendous potential for growth (personal and financial) and when you quit for good, you are out of the game and you close yourself to those opportunities.
So here are 3 things you could do before throwing in the proverbial white towel:
Take a break
I’ll confess: My past failures nearly drove me out of trading. My obsessive striving to become a better trader, yet **paradoxically** my refusal to change my behavior, eventually led to significant trading losses. I was in poor physical and mental health. At one point, things had gotten so out of hand that I had to take a major decision:
- Do I stay in the game?
- Do I quit?
After a sleepless night (one in many), I was in a park, sitting on a bench, trying to figure out the direction I would take. Eventually, I decided to press pause, just to get my life back in order.
As it turns out, this pause was instrumental in my development as a trader. You see, when your mind is too clouded, your judgment becomes impaired, and so does your behavior. And at this point, you’re just digging yourself a deeper hole. Taking a break allowed me to step away from the vicious cycle of losing and feeling bad. It helped me regain perspective and refocus on what’s important.
So, do not neglect the power of a pause. Take a few days, weeks, or months off to reassess and gather perspective. Then come back again, more prepared, wiser, and stronger.
Give yourself a time limit to make it work
Say, you give yourself 2 years. 730 days –that’s what you get to make trading work. At the end of those 2 years, if you’re seeing some improvement, give yourself maybe 6 more months. Or an additional year. If you don’t see any improvement at all, then quit.
But during those 2 years (or whatever amount of time you’ve decided upon), give it your all – trade small (to stay in the game) and focus on learning. In other words, vow not to focus on making money but to learn a set of money-making skills.
If you think about it, it’s akin to going to college/university for 2-3 years to learn something, get a diploma, so that you can land a job that pays well. It’s the same thing, the only difference being that, in trading, somehow, people have it backward – they want the money before even having developed the skills. Go figure…
Work on your mindset
So much of the endeavor of trading is psychological. And it’s too bad that this is so underappreciated. Mental edge and market edge go hand in hand. You might have the best trading system out there, but if you can’t pull the trigger at the right time, or cultivate perspective when you lose, you are in for a wild ride. No wonder then why the failure rate is so high in this field.
Working on your mindset is a daily process. It’s actively choosing to act out skillful states instead of unskilful ones all the time – when trading and when not trading.
- Action follows mood. Be very careful (discerning) of the kind of mood you’re bringing with you in trading. Take the day off if need be. Come back fresh tomorrow.
- When somebody cuts you off in traffic, breathe and do what you can to remain calm.
- While playing with your kid(s), or talking to people, do it with presence, slowly, appreciatively, and with focus.
- When you do the dishes, be diligent. Do things with care. Rush nothing.
Doing things a certain way affects your entire life. It’s all connected. Skilful states that are frequently practiced become the inclination of the mind. We are actually cultivating, in one way or another, the patterns and inclinations of our lives. And this automatically pours into trading. As you approach your life in a healthier way, you also approach trading in a healthier way, and you maximize your chances of success.
Trading, by its very nature, is full of uncertainty. You never know what’s really going happen. If you know what you’re doing by any measure, you can have a pretty good idea of what’s going to happen, but it’s never going to be a sure thing. And a lot of people find it very difficult to thrive under such conditions.
But with every problem and with every challenging situation, comes a great lesson. Life/the Universe/ God (whatever or want to call it) is saying: “Hey listen, there is something here that you haven’t mastered. So what are you going to do? Learn and master? Or walk away?”
No matter what you are currently experiencing in your trading and no matter how bad and painful it may look and feel, it is very important to remind yourself that no storm lasts forever. It will eventually come to pass. And what arises after that shall pass too. And the cycle continues… the person who walks that path with stability of mind is one who has already won the game.