Before I get into that, though, I want to provide some context.  

Conventional wisdom says not to trade for income until it makes sense. Typically once your trading income equals or surpasses your traditional income, and you can make the transition without affecting your life. I didn’t do that. I left my office job to start a photography company, and when that didn’t pan out, I put my full focus in to trading.

I had been studying financial markets and trading in the background for about 5 years at that point, but it was something I planned to use as supplemental income, not my primary source of it. I’d gone through several online classes, and decided that trading Forex was the best market for me to put my focus in to. So in my down-time — while applying for jobs, working my office job, working on my photography company etc. — I’d study FX, look at charts, and make trades. Around the time I was feeling discouraged in my photography, a recruiter reached out to me to join a prop firm, which was the push I needed to put my full effort behind this business.

It was going great for a long time; and while I hadn’t gotten to a place where my monthly income matched what I was making in my 9-to-5, I was improving consistently month after month and outperforming a lot of my colleagues at the prop firm. But then Covid hit.

Prices were wild and unpredictable, traditional chart patterns weren’t panning out like they had in the past, and my performance started to suffer. That was the beginning of a downward spiral that I’m still digging myself out of. with the market being in such a dire position, I leaned heavily on the coaches at the prop firm; seemingly along with a lot of other traders. It all came to a head one day when at the end of a meeting one of the coaches compared traders to athletes, saying that [like athletes] we as traders need to go out there and do the job, and not rely on the coaches so much.

As a life-long athlete, I didn’t like that comparison — For every hour an athlete is in actual competition, they’ve probably spent 3+ hours in practice and with coaches. Them using athletics to justify doing less coaching didn’t sit right with me. And since I had been outperforming my coaches anyway, I figured I no longer needed them (I didn’t think about FINRA rules or the capital I had access to, but I digress). I cut ties with the firm, and started out on my own.

Initially, I created an account with InteractiveBrokers, because that was the platform used by the prop firm. Unfortunately, though, there’s a minimum capital requirement to trade Forex on IB — which I didn’t figure out until I had already created my account and funded it. When I realized I couldn’t trade Forex in the platform I was in, I went looking for a place that I could. I already had an Oanda account from when I first started trading, but they’re only FX, and I wanted the ability to trade other securities. I’ll admit, the hype of GME got in my head, but I didn’t want to dive in without a plan, so I’d been studying how to trade stocks and options as well.

I settled on TD Ameritrade, and their ThinkorSwim platform. It consistently came up as a top-rated broker when I was doing my research, and I noticed a lot of the traders I was watching on YouTube used it as well. Everything looked good to me, so I withdrew my money from InteractiveBrokers and opened a TD account. But alas, TD has their own rules around trading Forex (that they don’t disclose and won’t tell you when you call), and so, I was (and am) still stuck not being able to trade Forex on their platform.

Once again, I pivoted. I didn’t want to open yet another trading account and move my money around again — and as a technical trader, I assumed the skills would translate — so I started putting my money into stocks and their options. And that brings us to May. For the few months prior, I was hovering around break even with my actual trades, though my account was growing from my portfolio. But hovering around break even isn’t why I got in to this. By this point, I expected to be at least back to my pre-Covid performance. Up 5%+ per month, being consistent and feeling confident. But it wasn’t happening.

Not having the success I expected to have, and still not being at a place where I’ve supplemented my income after all these years has really gotten to me. And now, oftentimes when I face the markets, I’m met with anxiety, not excitement. Since I’m anxious, I’m not thinking clearly or focused on the things I need to be focusing on, so I miss trades, or make mistakes, or simply lose trades. Losing trades doesn’t feel great, and affects my confidence (especially when it’s due to a simple mistake I shouldn’t have made), so I get more anxiety around trading and the cycle continues.

After over a month of losing trades without a single win, I was officially shook. Trading is such a tough business wherein sometimes the less you do, the better. How do you reconcile doing less when you’re not producing, but every time you do something the result is negative? I’m in this place where I want so bad to be a comfortable, confident trader, but every time I make moves, I seem to make the wrong ones. It’s a downward spiral that perpetuates itself.

But it can’t be this way forever. I’ve got to go back to what I was doing when I was successful, and I’ve got a plan. I was at my most successful when I was trading Forex, so I’m going back to that . I still have an active Oanda account, which I’ve funded, and that’s where I’m putting the bulk of my focus going forward (I still have my portfolio that I’m monitoring, but otherwise, I’m strictly FX).

When I was with the prop firm, I was paying desk fees for access to capital and coaching; but it was an expense I was willing to pay because I was confident I’d exceed the amount in profits relatively quickly. How did I build and maintain that confidence? Routine, reinforcement, and consistency.

First off, I had to truly believe in my strategy and my edge. I had to believe in it enough to be able to walk away from the charts when necessary and let things play out. With that belief, I was able to build a routine that allowed me to work on my mental health and my physical health, along with my trading skills.

I began the days with my mental health. I’d meditate for 15 – 20 minutes each morning, sometimes using a guided YouTube video, sometimes just listening to white noise with a timer; using that time to calm my mind, remind myself of my aptitude, and reinforce thought processes that I needed to succeed (such as being comfortable taking losses, knowing it’s all a part of trading and no strategy is perfect). Depending on the day and the circumstance, I would also sometimes do a short journaling session, writing down things I’m grateful for — to keep myself in a positive, receiving mood — and the things that would make the day a success.

Once my mental work was done, I’d begin looking at charts. I had a defined trading regimen that included a pre-trade analysis, which informed which securities to focus on for the day; a trading plan for when and how to enter and exit trades; and a post-trade review process (which didn’t always come immediately after my “trading time” as I’d often leave trades open throughout the day). Once I reached my defined stop for the trading morning, I’d head to the gym and work on my physical health.

I did this every day, and it led to a lot of success. As I mentioned before, I was hitting my goals consistently month-after-month; and more often than not, was earning more pips each month than the coaches at the prop firm. So, that’s what I’m going to attempt to do going forward. Build good habits and good routines again, and stick with them.

It’s definitely easier said than done, but I’ve got to do it if I want to continue to increase my successes. With the world looking a little different now than it did pre-Covid, my routine won’t be exactly the same, but that’s fine. As long as I work on my mind and body, consistently every day, the success will return.

Stay tuned for a more detailed breakdown of my daily routine and my new Forex trading plan, and let me know in the comments about your routines and how they’ve helped in your performance and life!

The post From Setbacks to Comebacks: Overcoming Bad Trades and Reclaiming Mental Strength in the Trading Journey appeared first on Anthony Bradley's Trading Journal.