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How can I rebuild a positive trading mindset after major losses?

How can I rebuild a positive trading mindset after major losses?
Asked by
John Riddle time-icon4 weeks ago
1 Answer Answer Question

Justin Freeman
Answered time-icon4 weeks ago

Most traders struggle to return to profitability after suffering major losses because their mindset changes. Whether you are an experienced trader or a newbie, losses are part of trading and should be expected. However, no trader anticipates major losses, which is why such losses typically hurt a trader’s mindset.

The fact that most traders do not plan for massive losses means that such setbacks leave a significant impact on their mindset, and this could lead to more losses if it’s left unresolved. Here is a look at how to rebuild a positive trading mindset.


Accept your mistakes

Major trading losses hurt because they are the result of our actions, and it is very hard for most traders to admit that they made a mistake. However, accepting that you might have made a mistake is the first step to moving on and rebuilding a positive trading mindset.

Some people equate making mistakes with being weak, but the truth is that mistakes are a crucial part of the learning process, and we can learn a lot more from our mistakes than from our correct actions. Accepting that you made a trading mistake opens the door for you to learn.


Do not criticise yourself

Human beings tend to be the greatest critics of their actions and will constantly say negative things about themselves, but this is not a good way to live as it harms your mindset.

You should focus on accepting that you made a mistake. Do not allow your ego to keep reminding you of your mistake once you’ve accepted it, however. As adults, we are taught to avoid making mistakes, which is good to a certain extent, but most people do not know how to turn their errors into valuable lessons.


Learn from your mistakes

Once you have accepted your mistakes, learning from them allows you to minimise the chances of repeating the same mistake in the future. The best way to learn from a mistake is to examine the losses and identify their root causes, which in most cases is related to a lack of proper risk management.

However, not all trading mistakes stem from this; you could also make mistakes related to the prices at which you took a trade or misreading the market. A trader might be distracted when taking a trade, leading to major losses from the simple mistake of not paying attention to the setup one is trading.


Be confident in your future success

Professional traders play to win, but their winning mindset can take a big hit after a massive loss that could have been prevented. To rebuild a positive trading mindset, you have to regain the confidence you had before experiencing the major losses that dented your confidence.

The fastest way to regain your confidence is to accept and learn from your mistakes. Once you have completed these two steps, you have to stop yourself from criticising past actions by affirming that you have accepted and learnt from your mistakes and are therefore unlikely to repeat them. You can create a daily affirmation to this effect to silence your ego and retrain your mind to focus on positive outcomes.



You can use meditation to train your mind to focus on winning by visualising scenarios where your trading decisions resulted in significant profits. By meditating, you can eliminate the influence of negativity bias, which automatically sets in after major losses. You can combine the four steps outlined above with meditation to transform your mindset into that of a highly successful professional trader. We have covered the impact of using meditation to transform your trading results at greater depth elsewhere on this site.


The bottom line

The truth is that developing a positive trading mindset is a crucial step for all traders, especially those who have endured massive losses in the past. The key to regaining a positive trading mindset is to accept and learn from your mistakes and then stop criticising yourself for your past actions. You should also create new affirmations that will rewire your brain for future success in trading. You can accelerate this process through meditation.

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