Suffering from a huge loss in CFD trading is common among new traders. Maybe due to their lapse in discipline, or a technology meltdown, at least once in their life, a trader will face a huge loss in their trading career. The trick here is how you should manage to bounce back from the downfall. The mental damage can draw a huge blow on you and could entirely damage your confidence. But you must remember, every successful trader has gone through these bad times. What made them amazing is that they were able to cope up with the fall.
How To Mend A Torn Confidence in Trading
It is true that overconfidence can be harmful. But then, successful traders also shouldn’t be trading in fear because as much as overconfidence is blinding, fear can be blinding too.
Accept the Responsibility
Maybe the loss was just because of a bad few trading days, or maybe it is the greatest loss in your entire trading career. Nonetheless, a huge trading loss might be the source of financial ruin. Then, you are left without much to do. In this case, you shouldn’t add to the already mountain level problem, resolve it first before you start to trade again. Never try to trade with a huge debt hoping that you can use the profits to abolish the debt. It will only add to your frustration and trading with this kind of emotion is not healthy.
What you can do is to accept the responsibility and find out what you should do to avoid these things from happening again. This is a much-desired solution rather than bottling up anger and setting the blame on others for the misfortunes you encounter. When you blame others, you are accepting the fact that you aren’t in control of your trades. If this is the case, you shouldn’t be trading in the first place.
Realign Your Focus
When you first start trading, you most likely have that surge of confidence, as if you are ready to rule the market and play it on the palm of your hands. You have developed this confidence as time passes by and you overcome difficult tasks and start to get better in your own ways. But after suffering a big loss, all that confidence is shattered.
If this happens, the best thing you can do is to get back to the basics. Check your trading plan and how you implemented it. Get your thoughts back to the time when you are so attracted to trading. What made you attracted to this industry? Trading is not easy and you have to embrace the challenge if you really love what you do.
After suffering from a huge blow, there’s no rush on rebuilding your portfolio. Start small and slowly rebuild what was lost. When you win a day with that small trading position, it will help boost your confidence. If you lose again in CFD trading, it won’t be that big of a deal because losing a small position size is easier to handle than losing a huge one.