When the going gets tough

As a trader there will be times when the ride is going to get rough, a series of losses will strike your trading system, and thus there will be no positive cash flow. Worst thing that hits a trader is that, it's the trader who has executed all the trades and which has resulted in losses, so that adds to the burgeoning stress. The trader feels frustrated, demotivated and his mind looms with all kinds of negative thoughts. He might also start to question about his choice of being a trader, was is the right choice did he make? After all no one supported his decision of being a trader. All of these thoughts constantly run in the trader's mind, through out the day and if he one of those unlucky souls, then these thoughts does not leave him alone even in the nights. Those peaceful days and nights are gone for the trader. 

This is what the phase of draw down does to a trader. Draw down is a period when a trader goes through a phase of loss, that is the trader is not able to make profits higher than the losses and thus his equity curve does not see new peaks. Usually this phase can last for months and for many big traders and hedge funds it can last for even a year. And most of the traders never get out of this phase, that is never make new equity high. Never claim back the lost capital. More one tries to recover from the losses more one makes loss, and these losses pile up so badly that the trader looses all hopes to see his capital to grow back to the initial levels.

This is the time most of the traders breaks down. Start to seek for trading gurus, sign up for any cheap trading course by anyone who claims to only make profits in the markets. The trader looses common sense and is in a trap of the devil within. He is so shaken that he does not anymore believe that the basic market principles. He believes that the nature of the market has changed suddenly, especially after he has started to trade. So the mighty trader either quits and comes back later with a strategy to suit the new market conditions or does some kind of tweak to his existing strategy. I do not have to put it in words what happens after this, experienced and even new traders know what happens next. 

The basic thing which is not addressed is that stock market is not a money minting machine, it is like a normal business which has its own cycles. No trader can ever skip the down cycle as long as one is in this game. The only way to emerge as a winner in this field is to accept the conditions as they are. The market is what it is.

Escape Velocity

I have experienced series of undesired outcomes which has been repetitive in nature in the field of stock trading. I felt like I was trapped in a vicious circle of loosing. I tried to work upon many things to get out of this phase. I was able to get out of the circle with some amount of hard work, only to get back into it. The frustration kept on building up and the mind started to play games. Instability crept in. Started not only to feel like a looser but started to believe like a looser and worst of all, started to behave like a looser. My actions in all the aspects of life and not anymore limited to trading started to reflect a looser.

So obviously there was no way to get back to the path of success if I were to behave like a looser. Once I realized this I started to work on this aspect, and was able to get out of that vicious circle once again. As I said earlier it was a repetitive pattern. So, I am sure by now you know what was coming next. Yes, you have guessed it right, I got back once again to the circle of loosing, only this time I was anticipating it to happen. By now I was so sure of myself that I knew pretty well that, I will fail. For the first time I was not frustrated with the failure rather I was happy, as something that I was anticipating had come true. One might find it pretty silly or some might even say that I started to enjoy failure.

I started to understand the basic structure of the markets, myself and my surroundings, and thus I knew what was in store for me if I continue with what I was doing until now. I will stay in the circle of loosing. So something needed to be done, something needed to be changed. What was that something, I started to examine and re-examine my earlier phases of winning and loosing, but I did not change anything nor was I interested in finding a solution. I was just interested in knowing what I have been doing, just as the way I did it, with no justification, whatsoever.

I have mostly been an keen observer of nature and have always appreciated how nature works. I realized that if I were to get out of the circle of loosing and not get back to it, I just needed to work on one thing that will produce enough push, that can throw me far away from the loosing circle's orbit. Rest will be taken care by the force of the nature.

This structural change has helped me and I believe can help anyone to get out of the undesired state of current being. Just work hard on one thing and build the required escape velocity to transcend to the new orbit of winning.