Warning – this article is not for everyone. If you’re feeling fragile or negative, please give it a miss. What follows is the part of trading psychology most people underestimate, written for traders sitting in a losing streak right now who need a straight answer, not a hug.
Table of Contents
The email that started this
Years ago, after one of my worst trading weeks, a reader sent me a one-line email:
“Sorry to agree with you here, but terrible trading on your part yesterday. Bounce back. Regards.”
That was a punch in the gut. I was initially furious – how dare this stranger comment on my trading? Then I sat with it for ten minutes and realised they were exactly right. I had traded horrendously. I’d known it before I read the email. The email just made me say it out loud.
That moment is the entire reason this page exists. Because there’s a clean response to a punch in the gut. Toughen up. This is not a game for crybabies. Either you love trading enough to sit with the loss, study what went wrong, and come back sharper – or you don’t, and you should walk away today.
There is no third option. The third option is where most failing traders live.
Two readers are on this page right now
One of you shouldn’t be trading. The other one is going to be fine. The hard part is working out which one you are – because they look identical from the inside.
Reader One – the wrong camp. Likes the idea of being a trader. Likes the lifestyle, the screens, the language. After a losing week, books a holiday or buys something expensive or just doesn’t look at the charts until Tuesday morning. Doesn’t keep a log. Can’t tell you what their last three mistakes were. Reads winners’ commentary to feel inspired, not to reverse-engineer it. Calls every drawdown “the market” rather than themselves. If trading is hard for a month, they go quiet, then go missing, then come back six months later with a new platform and the same problem.
Reader Two – the right camp. Loves trading the way other people love their craft. After a losing week, sits with the charts on the weekend. Knows their last three repeat mistakes by heart and has a written rule against each one. Gets angry at themselves, not the market – and uses that anger as fuel to refine the system. Took the punch in the gut, said “fair point”, and got back to work.
If you read those two descriptions and felt yourself flinch at the first one, good. That flinch is information. Pay attention to it.
The honest test – three questions
Forget motivation. Forget “do you love it.” Those questions are too easy to lie to yourself about. Answer these instead:
- After your last losing week, did you spend the weekend studying your own charts to find the specific mistake – or did you book a holiday, buy something expensive, or just not look?
- Can you name your last three losing trades, what you did wrong in each one, and the rule you put in place afterwards to stop yourself from doing it again?
- When you read commentary from a trader you respect, do you reverse-engineer their logic – or do you just envy the result?
If you can’t answer all three with a clear yes, you’re not actually putting in the work. That doesn’t mean you should quit. It means you haven’t decided yet. And undecided traders lose money slowly until they decide.
My worst week and the loop I used to come back
Here’s the actual story behind the email above.
It was a Friday in January. Earlier that week – Wednesday – I had traded hideously. I scratched out two points on the day, but I was all over the show. I cleared my head, studied the charts, wrote up what I’d done wrong, posted an update on the site, and moved on.
Thursday, I went back in. Early on, I missed one of my favourite setups – an end-of-trend warning signal on the 500-tick chart coinciding with a cyclical turn on the 4,500-tick chart. It would have been a beautiful runner. Then, anxious to be in the next trade, I made a poor entry near a news release and got taken out for a four-point loss.
I called it a day. Licked my wounds. Did what I tend to do when things go badly – I went out and bought a new surfboard. (Years ago in London, working as an analyst on a bad weekend, I bought the most expensive Paul Smith suit I’ve ever owned. Same instinct, different country.) Then I went back to the charts, reviewed the mistakes again, and slept on it.
Friday, I got back in the saddle. Three trades. 4.25 points. Back in the groove.
That’s it. That’s the whole loop. Lose. Sit. Diagnose. Re-enter with one rule changed. No magic, no breakthrough, no “I worked on my mindset.” A bad day, a clear head, a notebook, and the next session.
The reason this is worth writing about fifteen years later is that the loop hasn’t changed. The market changed, the indicators changed, and the chart packages changed. The loop didn’t. Every full-time trader I respect runs some version of it. Every washed-out trader I’ve watched skipped the middle two steps.
The recovery protocol – what to do tonight if you’re on a losing streak
If you’ve decided you’re in the right camp and you want to push through this losing streak in trading, here is the protocol. Do this tonight, not tomorrow.
- Close the platform. Walk away from the screens for at least an hour. Don’t review while you’re still hot – you’ll find the wrong mistake. The first explanation that comes to mind after a loss is almost always wrong.
- Print or screenshot every trade from the day. Not just the losers. The skipped setups and the early exits, too. Mistakes hide in the trades you didn’t take.
- For each trade, name the specific error in one sentence. Not “bad entry.” That’s useless. “Entered ten bars before signal confirmation because I was anxious to be in the trade after missing the previous setup.” That’s a usable diagnosis.
- Cluster the errors. Almost certainly, the same one or two mistakes show up across the week. That cluster is your real problem – not the losses themselves.
- Write the rule. One sentence. A specific behaviour change that, if you’d followed it this week, would have changed the outcome. “No re-entry within fifteen minutes of a stopped-out trade.” Stick it on the monitor.
- Watch the next session before you trade it. Don’t fire on the open the next day. Sit out the first thirty minutes. Watch the market do what it does. Re-enter when you’ve seen the pattern your new rule was written for.
That’s it. Six steps. The whole protocol takes about ninety minutes. The traders who do this every losing day compound their skill. The traders who skip it lose the same money on the same mistake every quarter for years.
The mechanism – turn this into a habit, not a one-off
The protocol above only works if you do it every losing day, not just the catastrophic ones. That’s where most traders fall down – they review the disasters and ignore the slow bleed. The slow bleed is what kills accounts.
The way I run this is a simple spreadsheet; I call it the 7 Deadly Sins Trade Log. It’s the seven mistakes that account for almost every losing trade I’ve ever taken, with a column to tick each one off against each trade. Over the course of a month, the pattern becomes undeniable – you can see your real problem in black and white. Without a log or journal, you’ll keep making the same mistake and explaining it differently every time.
If you take one action from this article, make it that one. Toughening up is not a feeling – it’s a logging habit. The traders who keep one, stay in the game. The ones who don’t, don’t.
Get the 7 Deadly Sins Trade Log >>
When quitting is the right answer
There’s also a version of this article where the tough thing isn’t to push through. It’s to walk away.
If you’ve read this far, and the honest answer is I don’t love this, I love the idea of this. Quit. Today. It will be the best decision you ever make. Trading is a brutal way to make a living if you don’t love the craft itself. The capital you’re burning could fund something you actually care about, and the hours you’re spending in front of charts could go to something that gives you energy instead of draining it.
That’s not weakness. That’s clarity. Most people never get to it because the fantasy is too sticky. If this article got you there, the article did its job.
FAQs
Should I quit trading after a losing streak?
Not because of the streak itself – every system or style of trading goes through drawdowns. Quit only if you realise you don’t love the process of trading. Losing weeks separate the two camps; they don’t define either one.
How do I deal with a bad trading day emotionally?
Step away from your charts for at least an hour, then run a written review of every trade – including the ones you skipped. The emotional weight lifts once you can name the specific error. Vague guilt is what eats you; specific diagnosis is what frees you.
What should I do after losing trades in a row?
Stop trading for one full session, do the six-step recovery protocol above, identify the cluster of repeat mistakes, and write one rule against the most common one. Don’t re-enter the market until you can name the rule out loud.
Is it normal to want to quit trading?
After a bad week, yes. The question to ask is whether the feeling fades by Sunday night when you sit back down with the charts. If it does, you’re in the right camp. If you’re still avoiding the charts by Tuesday, you have your answer.
The bottom line
Two reactions to a losing week. One says, “I love this; let me find the mistake.“ The other says, “I love the idea of this; let me find a distraction.” Reaction one is trading discipline. Reaction two is the slow exit ramp.
Pick one. Today. If it’s reaction one, download the 7 Deadly Sins Trade Log and review your week tonight. If it’s reaction two, close the platform and spend the capital on something you actually love.
The same logic applies whether you trade from a fixed desk or you’re trading while travelling – the psychology doesn’t change, only the logistics. If overtrading is part of your pattern, the companion article on why day trading feels like gambling is worth an honest read. And once the psychology is sorted, the Better Trading Indicators are the tools I trade with every session.
And if, after reading this article, you’re in need of some Aussie humor, check out Chopper and Harden the Fuck Up.
