Breaks play a major role in trading as they help in reducing or preventing the stress. Also, taking a break can help you in maintaining a consistent performance.
Hence, in today’s article, we are going to talk about when you should stop trading and take a break and the advantages of doing it. Now, without any further delay, let’s get to the topic.
There is a misconception in the market that those who trade more will eventually make more money. If you look at any successful traders in history, you will notice that they don’t trade every day of every month. They take very few trades but eventually they will come up with profits at the end of every month.
One important thing that we should learn from here is, It is more important to choose the right day or perfect setups rather than trading every single day. As an intraday trader, you get the privilege to choose your battle, and I think that is the biggest advantage we have. As a positional trader, you will not get this opportunity because once you take the position, you can’t do anything except setting up the target and stop loss for your trade. One of the biggest lessons that I think I have got from my trading journey is to trade less and win big when you win.
By trading less, you automatically eliminate the danger of overtrading. Overtrading is the biggest enemy of profitable trading, and I guess everyone knows that, but few understand it deeply.
I think doing nothing when there is nothing to do is the most difficult task in trading because we continuously try to find opportunities to trade. Also, many traders once they enter a trade, they try to find the reasons because of which that particular trade may fail and in the end, they exit the trade because of those reasons.
An important point we should understand here is, once you enter a trade, you have to do nothing except set up the stop loss and targets. Many traders exit the trade because they get influenced by other factors that are not even important. The point is we should get detached from the markets often, especially when we enter a trade.
Another advantage of detaching yourself from markets is you don’t check your PnL frequently, and that is the most important thing you can do as a trader to make consistent money from the markets.
Trading is not like a job where you do the same task every day, and at the end of the month, you get your paycheck. Many new traders forcefully enter the trade even when there is no setup and that costs them a lot. Generally, traders face problems because they want to be in a market all the time and the funniest thing about this is many traders know that trading all the time will not make them money but, then also they trade every day due to fear of missing the golden opportunities and they end up paying a huge cost.
Taking handful trades are very much important in trading because, in the end, they will make more contribution towards your overall profit. By doing this you will not only become a profitable trader but also will save your time and energy.
Traders go through different phases in their trading career. There will be times where you will make a profit in nearly every trade. Similarly, there will be times where you will have a continuous losing streak, and how you behave during tough times defines your profitability. Some traders get frustrated with losing streak, and they do revenge trading to recover their losses, and eventually, they lose more. Some traders understand that it’s not their day and the market is not in their favor as a result they stop trading, and these are the ones who make money in the longer run.
So, coming back to the point, In my opinion, if you lose continuously you should take a break from the trading, and trust me, if you continue to trade with the frustrated mind, you will lose more money. Once you get back to a proper trading mindset, start trading with smaller position sizing to retain that confidence, and after that, you can trade with initial position sizing which you used to trade earlier.
I hope that through this article, you were able to understand the benefits of taking a break from trading. I really suggest to everyone that every trader should take frequent breaks from trading in order to get back in the proper trading mindset, especially when you are going through your tough days. What do you think about this? Leave your answer in the comment section.
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