There’s been A LOT of red in the stock and crypto markets. The S&P 500 is trading near lows that it hasn’t seen since June 2020. Bitcoin has been in a downtrend for nearly 3 months now. Red hours turn into days, days into weeks, and today we see Bitcoin at a six-month low below $38,000 USD.
Red days are inevitable in trading. It’s important to understand that. If you cannot get comfortable with that truth, then trading may not be for you.
It’s important to learn how to deal with losing days, and sometimes weeks and months, in a healthy manner, otherwise you will open yourself up to more losing trades, and even more potential personal and mental issues.
How do you handle those red days? Here’s a few things that I do to help handle them.
Zoom Out
One of the worst things you can do is to sit and watch the minute and hourly charts of your assets drop further and further throughout the day. This does you no good.
Trading progress occurs over the course of days, weeks and even months. Try zooming out on the charts and look at the big picture. Look at the daily chart, then the weekly, and lastly the monthly charts. Look at the overall trend. If you are still green on the week or month, then it puts the red day in perspective. If you are still red on the weekly or monthly chart, then it gives you something to reflect upon and possibly gives you something to learn from for future trades.
Close the Charts
Sometimes it’s a good idea to get some fresh air and get away from the crypto markets for awhile after a bad day. This will give your brain a break, and also keep you from overtrading or revenge trading and potentially making your day even worse.
There are plenty of movies and shows that are available to help you get your mind off things. Or perhaps you can play a game or read a book. The point is, take a mental break before you go back and look over your trades from that day. This will help you figure out what what went wrong, and what you can do to prevent it in the future. Were you over investing? Did you set a stop-loss? You need to figure out whether your red trading day was because of poor decision making on your part, or your trades just not playing out.
Exercise
Physical exercise is one of the best ways to relieve stress. The crypto market can be very stressful because of it’s volatility. It is very easy to neglect your physical health as a trader because you’re constantly watching the charts. Trading is very time-consuming, it can be mentally and physically exhausting. Exercise will put you in a good mood and keep you healthy. One who is disciplined to keep a healthy routine of regular exercise will most likely be disciplined when it comes to other aspects of life, such as trading. Discipline is needed to keep from panic-selling on red days.
Accept Responsibility
Discipline will help you accept that you are ultimately responsible for whatever happens with your trades in the market, not someone else’s tweets, or someone’s financial or trade advice, or some President’s financial and/or executive decisions… YOU are ultimately responsible the result of your trades can and likely will happen again.
Blaming other factors and not accepting responsibility is admitting you don’t control your own trading. Accept responsibility for your trading decisions and figure out what could have been done differently. This will help reduce the chance of it happening again. If you control your trading then you can ultimately fix those red days and turn them into opportunities.
Anything can happen. Always expect the unexpected. Stick to your plan. Take profits. Set your stop losses. Don’t get greedy.
Thank you for your time! If you found this article interesting or helpful in any way please let me know in the comments below. Feel free to follow me for more articles on how I invest or how I earn other free rewards such as crypto, stocks, or gift cards.
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*Disclaimer- I am not a certified financial planner/advisor, certified financial analyst, economist, CPA, accountant, or lawyer, or anything important for that matter. The contents of this article are for informational, educational, and entertainment purposes only and do not constitute financial, accounting, or legal advice. Always do your own research.*
