Whether you're a new or seasoned trader, you're constantly exposed to many factors that can lead to or trigger burnout.
You're losing more than you're earning. You spend hours studying the charts only to see the trend you're hoping to profit from work against you. You were so sure of that last currency pair you bought, so what happened?
These situations and the feelings they arouse can accumulate and affect you mentally and emotionally. When this happens, you're not just stressed. You're burned out.
Forex trading is both hard and rewarding work. If it's worth pursuing, however, expect to hit some snags along the way.
If you feel a sense of urgency or anxiety while trading, you're experiencing stress. You're exhausted. But only on the physical level. After taking a break, you'll be right and ready to trade again.
Trading burnout, on the other hand, largely manifests itself psychologically and emotionally. You're not just anxious but also depressed, resulting in detachment or withdrawal.
Rather than feel excited on the next trading day, you want to give up because you feel helpless and hopeless. You begin to question if trading is still worth doing. Even after taking a break, the same negative feelings and thoughts remain.
Between stress and burnout, the latter is more damaging. If not managed properly, you might not bounce back from it.
This is why it’s important to know if you’re way past feeling stressed, so you’ll know what to do to get back on the right track and recover your zest for Forex trading.
Because it's easy to mistake stress with burnout and vice versa, you should be aware of the difference. Being self-aware is key to a good "diagnosis."
So answer the following questions:
If you answer yes to these questions, then you're undoubtedly burned out.
The moment you lose your motivation, become cynical about everything, and experience exhaustion and sleep disruption, you’re more than just stressed out.
Burnout doesn't happen overnight or is triggered by just one or two factors. It's a slow burn if you think about the events and emotions that all add up.
While it can be simplified as being overworked and unprofitable, there are specific causes that result in a trading burnout.
You're setting yourself up for failure if your expectations or goals are unrealistic and unclear, to begin with.
For example, you execute the same trade that you exited on a loss with the hope that the outcome will be different. Most of the time, you'll end up with the same result if you chase your losses or buy or sell on impulse.
The same is true if you have an unhealthy perfectionism towards trading. That is, the payoffs for all the efforts you exerted fall short and lead to frustration.
Isolation, combined with mounting frustration and exhaustion, increases your risk of trading burnout. Wouldn't it be great if you have someone to share your thoughts and concerns? How about someone to bounce off your trading ideas?
You might want to think about having a mentor as well. Doing so comes with amazing benefits you can enjoy for a long time.
Doing the same things day in and day out can be unstimulating and boring. Most Forex traders thrive in volatility, after all. If you're the kind of trader who likes to mix things up or want to feel productive all the time, the monotony of your daily tasks can lead to burnout.
Your negative perception of yourself and the possible outcomes of your trades is sure to consume all your energy. If you keep thinking that nothing is going right, you're going to trigger a cycle of despair that will be difficult to escape.
When the body is weak, your mind is unlikely to work optimally. If you're not sleeping well or caring for your physical needs, you're not helping your trading journey at all.
Seasoned Forex traders embrace risk and failure as part of trading and investing. The sooner you do the same, the more tolerant you are of uncertainties. If you have a hard time doing this, you're likely to get burned out at some point.
Are you sacrificing other areas of your life so you can give trading your 100%? If you end up with a persistent losing streak, your sacrifices are all in vain. You could burn relationships in the process too.
With your motivation shot and your frustrations through the roof, you could take a half-hearted approach to trading. This can lead to poor outcomes and start a vicious cycle of bad trades and poor decisions that in turn, increase burnout.
Now that you know what triggers burnout in traders, you should strive to do the opposite as a means of prevention. If you're already burned out, however, you should deal with it the best way possible.
You now know the difference between stress and burnout. You know that you're stressed when your optimism drops, but you’re burned out when you lose motivation and sleep with every trading decision you make.
Once you notice the signs of burnout, step back and deal with it right away.
Because unrealistic expectations and goals can be your downfall, protect yourself from them. For example, rather than hold on to a doomed trade, accept the fact that the signals say otherwise and listen to them.
Instead of thinking that the methods you tested on a demo account will have the same winning results on a live account, accept the possibility of drawdowns and losses.
This is especially helpful when you're day trading but not seeing the results you want. Take a short mental break to help you re-energise and re-focus.
If you're about to open another trade due to the frustration of your recent loss, take a moment to unwind. It's important that you open another trade with a clear mind and laser-like focus.
Because isolation causes burnout, don't try to do everything yourself. Find a trading buddy that you can share your ideas and frustrations with and who can offer you a fresh perspective on what you're doing. They can serve as your accountability partner too.
You can also explore the possibility of trading with a group. Think of it as joining a community of traders who can help with your progress or provide support when you need it.
What will help you sleep better or relieve body aches and pains? Do you feel better and relaxed after a workout? Do you feel energised after a healthy meal?
Take better care of yourself and you'll reduce your stress levels. Find ways to unwind and your mind will reset to a clean slate.
You're losing a grip on your trading decisions. The system you've set up and follow no longer yields positive results. Add to this the dynamic nature of the Forex market and the situation gets out of control.
Time to regain your hold on the reins. How do you do this and succeed?
Know more about what the Currency Strength Dashboard can do for you.
When burnout is too much, engaging the brakes is the best solution. Don't just slow down but stop entirely. Then, grab the opportunity to recover and re-evaluate.
Success in Forex trading isn't all about the profit. It also includes the joy and passion that the entire process adds to your life.
Therefore, if you're unhappy with your trading experience, then you're far from being successful.
It doesn't mean a lack of bad trades either. As what one of the most successful Forex traders Bill Lipschutz strongly believes in, you have to feel the pain of a wrong or bad trade. If you don't, then the game is all over.
So embrace the risk of Forex trading, expect stress to happen, but avoid burnout as much as possible.
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