Down in a Hole


Date: 11/30/2021
Author: Chris Hood


Be sure to check out new episodes of my video podcast each week, where my ace pupil Brian Jones and I talk the ins and outs of options trading- and give you insights and strategy that you can immediately put to work for you in the markets.

A string of losses can wreak havoc on your confidence.

Believe me, I know this from experience. Over the years, I’ve gone through some significant drawdowns that left me wondering whether or not to just throw in the towel and quit.

I’ve had the same experience on the jiu-jitsu mat and in the Muay Thai ring.

All jiu-jitsu gold medalists or kickboxing champions have bought those honors with countless beatings in training.

Even those martial artists who never enter tournaments have to come to terms with losing.

The old adage, “Fall down twice, get up three times.”, holds true in both fighting and trading.

In talking to clients over the years, I’ve noticed that closing a series of losing trades can create a negative mindset.

“When you think of yourself as a loser, it can become a self-fulfilling prophecy.”

Don’t get me wrong.

Each time your place a trade, you should consider it a 100% loss upfront because it very well could be. Planning this way prevents you from oversizing your positions.



Acknowledging potential risks when designing your trades makes you a better trader.

It’s the realization of multiple losses, especially over several weeks, that can start to erode your mindset. As a result, many either give up entirely or make increasingly risky trades to win back their money.

If you’re standing amidst the carnage of an unprofitable streak, I want you to do the following.

  1. Take a break from the market until you pull yourself together.
  2. Evaluate your past trades and find out what mistakes could have derailed you.
  3. Make the needed adjustments to your rules, then start trading again with smaller positions.

A negative mindset is a psychological problem.

It’s going to take some intense personal work to get over your fear of losing and regain the confidence to place more trades.

These challenging mental blocks are where having a mentor is most important.

You need someone to put things into perspective so that you can continue your journey towards consistent profitability.

My subscribers and I do well on the trades we place, as with our recent gain of 60% on CFLT. However, I get regular positive feedback on how my video updates and live webinars help them with their mental games.

The techniques and strategies of trading are relatively easy to teach, but keeping a winner’s mindset is much more difficult.

Something that has helped me tremendously over the past 20 years is keeping a trading journal.

It’s vital to keep basic data on your positions to evaluate your performance and improve. However, often forgotten but no less critical are notes about your feelings before, during, and after each trade.

You can keep this separate from your trade log or just add in a section for notes.

Here are a few prompts to get you started:

Did I follow my rules? If not, then what guided this trade?

               Was there something else going on in my life that may have affected my decision-making?

               Which emotions, if any, did I feel during the trade? Did greed, fear, or impatience play a role?

Obviously, this list goes on indefinitely. The key is to be thoughtful and reflective about how you react to market events.

Putting your internal thoughts on paper clarifies and documents them. If you begin to see a pattern that leads to losses, all you need to do is correct it.

Perhaps Mondays are your busiest day at work. Deadlines, meetings, and phone calls distract you, and you tend to make more mistakes.

Simple fix. Don’t trade on Mondays.

There’s no trading problem you can’t fix, but you have to acknowledge it, analyze the issue, and put in the work.

Chris Hood


P.S. Don’t forget to check out my colleague Dr. Kent Moor’s Sigma Trading System. A revolutionary method of picking winners like the most recent win of 118% on LIACF. Click here to find out more.




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