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How To Handle A Bad Trading Day

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Trading is as much about routine as anything. The markets have a personality based on the time of day, week, and month. As traders, we typically look to identify routine chart patterns and stable cash flow. However, eventually, a bad day arrives. I’ve known some trading systems that account for losing days regularly with lower probability but a higher return on risk strategy. However, I find that most traders attempt to have more top probability systems and seek to avoid losing days, understandably so. 

I was recently talking to a trader whom I knew to be in the markets every day. I found it unusual that he wasn’t engaging his charts on a particular day. Then a couple of days later, I found it very odd that he was remaining flat. As he and I conversed, I realized the markets had burnt him in consecutive days, and he was easing himself back into the markets. All of this caused me to reflect on what to do to respond to a bad trading day.

Now, from the onset, I believe everyone’s style and personality are different; therefore, what works for someone else may not work for you. Therefore it is essential to find your way to deal with a bad trading day, but here are some potentially helpful tips. The first two recommendations will demonstrate how different individuals may respond in different ways. 

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Relax After Hours

Now this will be determined by your personality. Many traders tend to be analytical. Sometimes, being overly analytical can be unhelpful, especially after a bad day. Let’s face it, at times there are no specific reasons, a system that works 95% of the time, will eventually have a losing streak, it’s a mathematical fact. So rather than stewing in your losses, it might be best to relax your brain and take in some fun; otherwise, analysis paralysis might set in (see final tip). Some forms of relaxation might be as simple as watching a movie, taking a hot bath, or turning on the Xbox. 

Think Things Through

I understand that sometimes you can’t just walk away and forget a bad day. A post-mortem of what occurred in the trading day could benefit you to see where alterations to your approach are needed, which in turn might give you more confidence in going forward. However, the concern I have is that after a mentally taxing day, that to drain yourself further intellectually could have adverse effects. It may tire you out for the following day, or even negatively skew your perceptions of the trading autopsy. It might be best to wait until the weekend to do this type of analysis.

Enjoy a Good Meal

You might assume this fixes nothing. However, it is under-discussed how much brain power that trading absorbs. Brain energy comes from fats. At the very least, you must replenish your nourishment. So many problems come from a trader’s poor diet that I realize this alone will be subject of a subsequent article. A temperament can become melancholy after a losing day of trading, when melancholy, we tend to eat differently. Some will eat less or nothing; others might tend to eat more. Whatever your tendency might be, it is good to eat something enjoyable and agreeable with your body, that restores your energy. Nobody needs to be awake in the middle of the night before another trading day because of heartburn or digestive issues. A good meal, however, restores more than nutrients, it can also be the source of relaxation and throw in a drink that complements your evening, responsibly, and you might be ready to rebound the next trading day. 


Unfortunately, being glued to screens and desks is not a vibrant physical living. Not only might it lead to damaging physical effects, but it can also lead to emotional unhealthiness as well. In the same way, a mind must be active to be healthy, so must a body be engaged to maintain functionality. Exercise should be part of any of our routine; however, it becomes a great tool to combat a losing day. The tense energy that gets built up in our bodies can be extreme. Exercise has so many benefits, including an avenue where this physical tension may escape. There are many ways to be physically active; you can be creative!  

It Doesn’t Have to be Rocket Science

No, these ideas are not profound, but as simple as they are, traders tend to avoid these beneficial practices. In my career, I have frequently encountered traders who respond to losing days by compounding their problems, leading to bad days that would otherwise be avoidable. As important as it is to encourage you to take steps to overcome these bad days, it’s also helpful to remind you why you must healthily respond to bad days.

Thinking of Others

We all have relationships. Those of us with significant others and children have full-time relationships. One of the worse things we can do is to let a bad day at the office interfere with these relationships, either by depression, anger, or cumbersome workload. We must think of the ones we love and to not let our bad days become a burden to them. Taking these steps above help us avoid releasing negative energy upon them. 

Avoid The Freeze

Traders tend to have a high sense of confidence; this is an inherent quality that is joint to our success as we must make quick decisions. However, nothing hurts our confidence like a losing day. I’ve found that the way a trader creates a personal routine in response to losing days will determine how well they rebound or if they suffer the dreadful freeze. We have likely all been there in our process when self-doubt replaces our instantaneous decisions. Then we are left uncomfortable to enter the markets, remaining on the sidelines. Doubt often comes from traders who stay in yesterday’s lousy atmosphere.  

The ability to walk away from a bad day is crucial to long term trading success, and listed here were keys to respond mentally, physically, and emotionally to the toll of losing days. You might have other ideas that have helped you along the way. If so, I look forward to your comments below. 



Posted by Fair Value Trader on August 13, 2020
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