On Monday, October 19, 1987, the Dow Jones Industrial Average fell more than 500 points. As markets in Europe, Asia, and the United States began to plummet, some traders, such as Paul Tudor Jones, were able to take advantage of the slump, while others, such as Richard Dennis, lost everything.
Dennis, a world-renowned trader during the 1980s and 1990s, lost $ 10 million in less than 24 hours and a total of $ 50 million in the stock market by the end of 1988. He ran a business with very little money left over to make a living, so he could easily quit his job as a commodity trader.
But the Turtle Trading think tank was ready to make up for the losses. Dennis in the book Market Wizards: Interviews with Top Traders, Has shared his approach on how to deal with a set of false trades. “It simply came to our notice then.
There is another point that I think is important; You should expect the unexpected in this business. There is no limit to the market that limits it. If there is one thing I have learned in my nearly 20 years in the profession, it is that the unexpected and the impossible happen from time to time.
You too may be looking for ways to escape these unexpected events. Practices that have helped traders like Ray Dalio, Jesse Livermore, and Richard Dennis emerge proud of their failures can prepare you for 21st century success.
In this article to help Content According to the trading website, there are three tips for overcoming consecutive breaks, based on topics related to trading psychology, scientific research, and the experiences of the world’s largest traders.
1. Become a stubborn trader
When your decisions lead to successive failures, you may doubt your skills, knowledge, and abilities as a trader. But the secret to overcoming a financial failure is your mental endurance, not the foundation of your knowledge. According to Dr. Carol Dweck, Professor of Psychology at Stanford University, the most resilient students, athletes and entrepreneurs, A mindset based on growth and development have. When faced with new challenges, they decide to work harder, learn new skills, and strengthen their current abilities. They also use failure as an opportunity to grow.
۲. Change your approach to trading
Obviously, just having a winning mentality is not enough. When you are suffering from a series of financial failures, you may need to change your trading strategy.
According to the definition provided by the Inostopedia website, a trading strategy is a way of buying and selling in the market that is based on pre-defined rules for making trading decisions. In other words, a trading strategy is a process that prepares you for potential financial success by striving to meet positive expectations. So the next step is to look at your trading strategy clearly. Here are four steps you can take to begin the process of preparation for mediation.
- Take a screenshot of your 10 successful and 10 unsuccessful trades and print it
- Identify items that are common to your best and worst trades
- Make a checklist based on your findings from your top 10 trades
- When you start a new trade, make sure it meets the checklist criteria.
3. Your Pull aside
When emotions overwhelm you, you may no longer be able to react to the damage with the same strength and resilience you once had. Sometimes the best thing you can do is give up your emotional attachment to the deal.
No one knows this better than Victor Sperandeo, CEO of Alpha Financial Technologies. Esperando, like Paul Toder Jones, made millions of dollars during the stock market crash of 1987. He later said:
The key to success in business is to have emotional discipline. If intelligence were more important, many people could be financially successful in the marketplace.
If you think your emotions are hindering your future success, you need to find a way to direct your energy in a positive direction. In the short term, activities such as walking, running and yoga can help you divert your mental space from your past activities, focus on your next tasks and increase your focus. Once you’ve done that, when you get back to your desk, you can think about your next deal, without your emotions having a negative effect on you.