You vs Market: Finding a way out
‘The market is against me’- Haven’t you uttered this phrase ever in your trading career. I bet you every trader would have arrived at this zone at one point in their career. But can the market really be against you?
You don’t matter to the market
You’re just one among the millions (or even billions) of traders in the market. And if someone is really taking the time and effort to look into your position and then move the market against you, this could be the biggest conspiracy theory in history. Remember, even your ex-s are not spending a dime to see you cry, then why should a corporate giant care about you. The retail community as a whole constitutes only 3% of the traded volume. So, get it out of your head.
Take some time off the market
It’s the last thing you want to do in this situation but the first thing you must do. Distance yourself from the market, cool off, and then you might get a rational perspective. Everyone has made wrong decisions in the market, even the experts, but how you bounce back matters. The time off can help you recuperate and accumulate the psychological capital you need.
Revisit your strategy
Take a hard look at the strategy. Does it have the same mojo it had when you invented it? Or has the market evolved? Either way, you have to give up the strategy or make the necessary tweaks. If the strategy is not the problem, then your risk exposure is. You might be using a tight stop that could make a mockery of the volatility. Or a huge lot size that could sway your emotion easily.