The first signal is to stop making documentation and analysis of your own trades. It can be the result of many factors but it always ends badly.
Here are a few possible reasons:
- Overconfidence – the belief that you understand the market through and do not have to be careful, do not need to learn. This is usually accompanied by excessive enlargement of the trade (or number of trades) and imminent losses. This is a very common phenomenon, practically every one of the best traders went through it.
- Lack of awareness that documentation of own trades is necessary. Some traders know the market, they just feel it and… do not notice the moment when it start to change. The system can generate profits for years but… after some time the market is changing and profitability may disappear. If the trader does not have methods to control the effectiveness of the system and his own actions, then he may lose the profitability. and misinterpret it with psychological problems or other external factors (eg change of workplace).
Analyzing your own trades and analyzing market behavior is the key to controlling the situation. The first thing I do when people with loss problems approach me, I try to verify if the problem is in the periodic (or permanent) volatility of the market or not. If so, then psychological work will not bring any improvement in profits in this area. First, you need to refine the system and in this process. Still, psychological strengthening may be very helpful to strengthen you patience, discipline, self-denial, etc.