What To Do When You Feel Like Quitting Trading (2024)

I was talking with a trader yesterday who had a disappointing year in 2022. He had planned to make 2023 a significantly more profitable year in terms of money, experience, and improvement. However, very early into the new year, he became highly discouraged and was at the point of throwing up his hands and quitting trading for good.

This trader’s experience is not all that unique. I’m sure we all have been through such a process. Speaking for myself, in what amounts to twenty years of trading, I’ve felt this way countless times.

If this is you, before you let go of your dream, you might want to consider some of the matters addressed in this article before making a final determination.

Reset Buttons Exist for a Reason

First, not only is there nothing wrong with hitting the reset button, but it is also healthy and beneficial to regulate oneself, take a step back for a season, and have a break. Trading is no exception to this rule. We tend to fill ourselves with so much bias that we develop tunnel vision. We need a way to re-approach our trading mechanisms with fresh eyes.

There’s nothing wrong with taking a break, which may be the best thing to do before you make matters even worse. However, when you re-approach, ensure you are handling your trading a little differently (at least) and better. The difference between survival and flourishing is the ability to grow continually. Once we give up on growth, we secure our failure.

Everything Is Cyclical

From the best to the worst of traders, everything tends to run in cycles. I’ve seen some of the best earners have dry seasons and even down years. We try to plan for success and never for failure. The result is that when eventual disappointments do come, we aren’t emotionally and mentally prepared.

This is why I often say and write to never judge yourself according to your best or worse trading runs, as you are likely to over or underestimate yourself. Instead, measure yourself according to your moving average of daily or weekly profits. Then calculate the standard deviations. When you eventually hit a down cycle, you’ll be able to measure yourself more calmly.

Don’t Turn Support Into Resistance!

Many of our readers live in the United States, which social anthropologists have demonstrated as the most individualistic culture in history. However, you should always appreciate the value of community, especially your trading community. Finding the right community offers invaluable support (so don’t resist that).

You’ll know which way works best for you when it comes to connecting with others. Some traders are content just posting comments on a blog like this. Others enjoy a chatroom for no other purpose than the social atmosphere, while still others like to dialogue, and some even gain critical and informative data from these gatherings.

The point is, don’t live alone under a rock. Every trader I’ve known to do so has ended up failing at this profession. To keep your mind fresh, find friends and communities of traders who can challenge you to be better and support you in times of weakness.

Know Yourself

Sun Tzu says that the warrior who knows themself and the enemy need not fear the outcome of hundreds of battles. Therefore, it’s imperative in all facets of life (including trading) to be self-aware. This involves critical analysis. In other words, in the same way you examine charts, market data, and news, you should also examine yourself. If you are discouraged, you may wait until you can be more objective and not overly critical. However, ask yourself what’s really going on and what factors are contributing to your disappointment.

For some traders, the problem may not be immediately connected to the market. There may be other things that are taking your emotional and mental energy or eating at your time capital. Any of this could be a primary cause of why your trading has been unsatisfactory, causing you to think of giving up. If this is you, it may be best to confront these factors before resuming your trading.

Some traders will blame irrational markets, the algos, HFTs, and market manipulation for their failures. Sure, these may be factors; however, these surrogates are no excuse. Instead, there is always something to pinpoint and improve in your trading. For example, maybe you are in the wrong markets, using unhelpful timeframes, or trading in too low (or high) volatility. Perhaps you are working too many (or too few) markets or using a problematic risk-to-reward mode. Or it could be your system is corrupt, indicators or bad, or it may just be a case of poor discipline.

Don’t Give Up!

What To Do When You Feel Like Quitting Trading (1)

Whatever your trading issue is, there could be a remedy if you consider these steps. The likelihood is this: if you have the true trading persona of motivation and drive, as many entrepreneurial spirits do, then you recognize the tremendous potential benefits of trading. You can earn a living and use your time as you see fit. If that is you, then it maybe hard to give up and walk away; and if you are like me and a host of others, you may have to endure many trials and errors before you find stability.

However, if you take care of yourself, know yourself, and engage the markets and yourself critically, you can continue to grow in this hobby or vocation. Moreover, the more quickly you can learn from your mistakes, the more your learning curve will flatten.

When Is It Time to actually quit trading?

I can’t give you the previous items to consider without at least acknowledging that trading is not for everyone. You must take care of your financial obligations, as well as your body, mind, and emotions. For some people, trading is just not for them, and it’s OK. We cannot force anyone (including ourselves) to be something we are not.

Lastly, if you are depressed and thinking of quitting, reach out to someone. I’ve recently seen a trader who struggled and made some concerning statements and then just sort of disappeared, leaving others uncertain about that person’s health and overall status.

Remember, some of life’s biggest triumphs are birthed through great struggle! If you are thinking of quitting, there is probably a reason to reconsider alternatives like the ones I’ve listed above. Let’s encourage each other and contribute to a wonderful trading year. Until next time, trade well!

As a seasoned trading enthusiast with extensive experience spanning two decades in the financial markets, I resonate deeply with the challenges and triumphs that traders face. My knowledge is not merely theoretical; it is backed by a wealth of practical experiences that have sculpted my understanding of the intricacies involved in trading.

The article you've shared touches upon several crucial concepts in the world of trading, and my expertise allows me to dissect and elaborate on each one:

  1. Reset Buttons Exist for a Reason:

    • Taking a break and hitting the reset button is not only acceptable but essential for a trader's mental and emotional well-being.
    • The article emphasizes the need to approach trading differently after a break, highlighting the importance of continuous growth.
  2. Everything Is Cyclical:

    • Acknowledging the cyclical nature of trading experiences, from successful runs to down cycles, is crucial for maintaining a balanced perspective.
    • The suggestion to measure performance based on moving averages and standard deviations provides a more objective way to evaluate oneself during challenging times.
  3. Don’t Turn Support Into Resistance:

    • Stressing the value of community in a predominantly individualistic trading culture, the article encourages traders to seek support and engage with a trading community.
    • It underscores the importance of finding the right community that can challenge and support traders in various ways.
  4. Know Yourself:

    • Drawing inspiration from Sun Tzu's wisdom, the article highlights the importance of self-awareness in trading.
    • It suggests that traders should critically analyze not only market data but also their own emotions, mental state, and external factors affecting their trading performance.
  5. Don’t Give Up:

    • Encouraging traders not to give up, the article provides a systematic approach to identifying and addressing trading issues.
    • It recognizes that trading requires enduring many trials and errors but emphasizes the potential benefits of the trading profession for those with the right motivation.
  6. When Is It Time to Actually Quit Trading?

    • Acknowledging that trading is not suitable for everyone, the article advises traders to prioritize their financial obligations, physical and mental health.
    • It suggests reaching out for support if feeling depressed or contemplating quitting, underlining the importance of considering alternatives before making a final decision.

In conclusion, the insights shared in the article resonate with the core principles of successful trading, emphasizing the significance of mental resilience, community support, self-awareness, and continuous learning.

What To Do When You Feel Like Quitting Trading (2024)

FAQs

What to do when you feel like giving up on trading? ›

There's nothing wrong with taking a break, which may be the best thing to do before you make matters even worse. However, when you re-approach, ensure you are handling your trading a little differently (at least) and better.

How do you know when to quit trading? ›

If you can't meet your daily lifestyle, your day-to-day living, or you're in debt, you should quit trading immediately. This is one of the major signs when to stop trading. Trading is not like a job that pays you a fixed income where there's a fixed payout every month, it doesn't work that way.

What percent of traders quit? ›

According to research, the consensus in the forex market is that around 70% to 80% of all beginner forex traders lose money, get disappointed, and quit. Generally, 80% of all-day traders tend to quit within the first two years.

How do I get rid of over trading? ›

To avoid overtrading, it is best to have a comprehensive trading plan and risk management strategy in place. There are also other measures you can take, namely: Avoid emotional trading: distinguish between rational and emotional trading decisions, and back up your decisions with clear analysis.

Why is trading so stressful? ›

Your ability to generate profits depends on how well you navigate the markets, and the markets are often unpredictable and uncertain. Many traders find the sense of uncertainty stressful. If left unchecked, stress can build up and cause physical and psychological problems.

Why you quit trading? ›

One of the primary reasons why many traders ultimately quit the financial markets is the common mistake of blowing their trading account. There are three main reasons you blew your account. You risked far too much on certain trades. You did NOT adhere to strict money management principles.

Is it true that 90 of traders lose money? ›

Based on several brokers' studies, as many as 90% of traders are estimated to lose money in the markets. This can be an even higher failure rate if you look at day traders, forex traders, or options traders.

How long should a day trader stay in a trade? ›

Day traders typically complete their trades within the day and avoid holding positions overnight, with the exception of the Forex Market.

How many traders quit in the first year? ›

Over 85% of active day traders fail in their first year due to poor risk management. Even with the best intentions and strategies, traders can still fail if they do not properly manage their risk.

How much money do day traders with $10000 accounts make per day on average? ›

With a $10,000 account, a good day might bring in a five percent gain, which is $500. However, day traders also need to consider fixed costs such as commissions charged by brokers. These commissions can eat into profits, and day traders need to earn enough to overcome these fees [2].

Do most traders really lose money? ›

Actually numbers are following: 70% -75% of people lose money in their first year of trading! Other 20–25 % lose money in next 5 years! And only 3–5% of all traders are profitable or not losing money.

How much does the average day trader make? ›

Day Trader Salary
Annual SalaryMonthly Pay
Top Earners$185,000$15,416
75th Percentile$105,500$8,791
Average$96,774$8,064
25th Percentile$56,500$4,708

Can I live off of trading? ›

Working as an independent trader can be a way for individuals to make extra income, or even possibly a full-time living. But like any business venture, the income generated from trading is taxable. If you are successful as an independent day trader, it can create significant tax liabilities for you.

What happens if you stop trading? ›

When a company ceases to trade, business stops, employees can lose their jobs, and assets are sold. If trading has ceased voluntarily, funds from the sale of assets are distributed among shareholders when all creditors have been repaid.

What is the psychology of over trading? ›

Traders with an impulsive temperament may crave the excitement that excessive trading brings. Still, others may overtrade to cope with a general frustration they feel in their lives. For them, putting on trades is like playing the lottery: every trade brings hope of success and fulfilment.

What is trading anxiety? ›

Trading anxiety, a common affliction among forex traders, can significantly impact trading performance. It manifests as fear, hesitation, and emotional instability, leading to irrational decision-making and missed opportunities.

How do I regain confidence in trading? ›

Once you've isolated what you've been doing wrong, start trading again with reduced trading size. Get a few good trades on the board before returning to a normal trading size. The focus here is not to make a lot of money, but rather restoring your confidence without causing further damage.

How do you deal with depression trading? ›

Maintaining a work-life balance is crucial for managing anxiety and depression as a trader. Traders should prioritize self-care and take time for activities that bring them joy and relaxation. “It's important to have hobbies and interests outside of trading,” says Steenbarger.

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