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Yes, Give it to me

When Should You Quit Trading? 

Last Updated: October 27, 2020

By Rayner

Does this sound like you?

You put your heart and soul into trading but your losses keep piling up.

You’ve been trading for a few years now without any results to show for.

You’ve realized the money you lost could be put to better use elsewhere.

So now the question is:

Should you quit trading, or not?

Read on to find out more…

If you’re struggling financially, you should stop trading immediately. Here’s why…

Here’s the thing:

Many traders get involved in trading because they want another source of income so they can pay the bills, put food on the table, and have a better life.

And if you’re struggling financially, it might seem that trading is your ticket to a better future.

But, this couldn’t be further from the truth.

Here’s why…

Trading is not a get-rich-quick scheme.

Trading isn’t something where you can put in $100 and get back $200 the next day.

Trading isn’t something that will pay you consistently week after week or month after month.

Why?

Because there’s risk involved — so there’s no guarantee in trading.

So, if you’re struggling financially, that money should be put to better use like paying the bills, providing for your family, putting food on the table, etc.

You don’t want to risk your hard-earned money on something that may or may not work because that’s not fair to your loved ones.

And this brings me to my next point…

Borrowing money to trade is financial suicide. Quit now while you still can…

Trading is a mental game.

If you want to excel in this endeavour, your mindset must be at peak performance.

But if you borrow money to trade, you erode whatever edge that you might have.

Here’s why…

Trading with borrowed money = Trading with money you can’t afford to lose.

And when you trade with money you can’t afford to lose, you make poor trading decisions because you have the “I can’t afford to lose” mentality.

So, what do you do?

  • You shift your stop loss because you don’t want to take a loss
  • You take tiny profits because you’re afraid of watching them turn to losers
  • You average into your losers hoping to catch the bounce and recover your losses

Eventually, your poor decisions catch up with you and you lose everything (including the money you borrowed).

Now you’re worst off than before because not only are you broke — you’re also in debt.

Do you want this to happen to you?

Then, don’t borrow money to trade.

Repeat after me…

I’ll never borrow money to trade!

Your mental capital is toasted

Mental capital is the finite amount of “energy” to do something (whether it’s trading, exercising, studying, etc.).

And for you, your mental capital is at its peak when you just start trading. That’s because you experience hope, aspirations, and possibilities.

But as the years go by, your mental capital gets depleted.

You have thoughts like:

“This game is rigged and it’s not possible to make money from trading.”

“I’ve been doing it for years but still, no results to show for. I’m a loser.”

“I’ve blown up multiple trading accounts costing me thousands of dollars. This money could be better used elsewhere. Maybe I should stop trading…”

But if you haven’t reached this stage yet, then here’s what you can do…

#1: Manage your expectations

Trading is not a get-rich-quick scheme. It’s impossible to master it over a weekend and expect to be consistently profitable in a few months.

So give yourself time to build a strong foundation.

You’ll likely take 3 years (or more) to know what you’re doing and how this game is played. Plus, there’s no guarantee you’ll even make a single cent.

So, manage your expectations!

#2: Start small

When you start trading, your performance will be at its worst as you have no clue what you’re doing.

To compensate for your lack of experience, you want to start small — so you can reduce your “tuition fees” paid to the market.

This means you want to fund your account with as little money as possible, just to get your feet wet.

And even if you blow up your account, it’s not the end as it’s only a small amount of money which you can afford to lose — and that preserves your mental capital.

#3: Focus on the process, not the results

You’re probably wondering:

“What’s the difference between process and result?”

Well, the result is the outcome you want and it’s not within your control (like to make $10,000 a month from trading).

The process is the steps you’ll take to reach your goal and they are things which you can control.

For example…

  • I’ll develop a trading strategy that has been backtested over the last 10 years
  • I’ll execute 1,000 trades according to my trading plan without deviation
  • I’ll risk not more than 1% of my account on every trade

Does it make sense?

So focus on the process and the results will follow (it’s cliché but true).

The pain of losing money hurts you too much

This might not win me friends but it must be said…

Not everyone is meant to be a trader. Yup, you read me right. Not everyone is meant for trading.

Why?

Because trading involves risk and not everyone can embrace risk in the same manner.

Here’s a true story…

When I was studying in polytechnic at 18 years old, I owed John (not his real name) 10 cents for a reason I can’t recall.

To most of you, it’s only 10 cents and you probably would forget about it — heck some of you might even tell me to keep the change.

But no, not for John.

He pursued me high and low for the 10 cents, pulled the collar of my tee-shirt, and strongly demanded…

…for his 10 cents (or there will be blood, ok I’m kidding the blood part).

But you get my point.

And yes, I should have quickly returned the 10 cents as it’s morally right to do so.

Clearly, John isn’t someone meant for trading because the pain of losing money hurts him too much.

Now you’re probably wondering:

“How do I know if trading is for me?”

For starters, you must be comfortable with risk-taking.

If a small loss bothers till you can’t sleep at night, or you keep thinking about it the whole day, then trading is probably not for you.

And there’s no shame in that because not everyone is meant to be a trader. Just like how not everyone is meant to be an entrepreneur, an employee, or an Olympian.

Now, here’s the good news…

Just because you quit trading doesn’t mean it’s for good. You can always come back when you’re ready as the market is always around.

So here are a few things to help you get back on track…

#1: Pay off your debts

You want to start at ground zero and not put yourself at a (psychological and financial) disadvantage.

So, pay off your credit card debts, the money you owe others, etc.

Once you’re at a clean slate, that’s where you can work your way up.

#2: Get a job

The last thing you want is to rely on trading to pay your bills — that’s a recipe for disaster.

So get a job and have a regular source of income. When you can put food on the table without worries, you’re in a better mental position to trade because you’re trading with money you can afford to lose.

#3: Trade the higher timeframe

Trading the higher timeframe offers numerous benefits…

  1. It’s less stressful as the market moves “slower” and you have more time to make decisions
  2. You can have a full-time job which reduces your opportunity cost
  3. It requires less screen time which allows you to do the things you love

And finally…

#4: Take time away from trading

When you feel that you can’t trade anymore or you don’t know what you’re doing, take a break from trading. Walk away.

When you’ve got nothing on the line, you can re-evaluate what went wrong and how to improve on things.

So take time away to “reset” your mind, then come back stronger to fight again.

Conclusion

Here’s a recap of what we’ve covered in this post:

  • Trading will not get you out of poverty. If you’re struggling financially, get a job
  • Trading is not the answer to your debt problems. If you are in debt, pay it off first before anything else
  • If trading is exhausting you, then take a break from trading. You can always come back later
  • Not everyone is meant to be a trader. If the pain of losing money is too much to bear, then trading is probably not for you

Now here’s what I’d like to know…

Have you ever planned to quit trading?

Leave a comment below and share your thoughts with me.

  • Honestly I’d thought of quitting but I let my mind follow a conviction that the trading exercise requires a level of mental health not one when I’m under pressure of bills and debt. Your write up validate this strong conviction in me and just like many of your write ups, this had a huge impression on me. Thanks.

  • I got the email at such a perfect time! Thank you so much for sharing such an amazing article! Honestly I really needed to read something like this.

  • I have thought about quiting as thier is to many different types of trading styles when you are learning one their is more you get confused I find it difficult to use trading view but alot of teachers don’t give you the time to show you properly it’s so dis hearting and frustrating makes you question your ability

  • That right,first time trading i afraid loss money cause my salary not to much..i always move stop loss..but now it,s ok.i just trade with DAILY TF&forget it.

  • Hi
    Your advise is genuine.
    1. I have a job which makes me work very hard and allows me to live comfortably with little savings.
    2. I Have been trying to make myself succeed in training for more than 6.5 years now. I have really literally felt the same thing. I take some trade. Loose some money and I get disheartened that I still need to learn a lot. Then i quit trading. The psychology of paying your loans is not allowing me to focus on trading. Every time i change the instrument and again get into with some zeal and with little loss, i give in. So now, I want to get rid of loans as first priority before again getting into it while preparing myself to be a better trader.

  • “Spot-on” Article, Rayner.
    And, the best part is that you have given a honest and true advice.
    Very good and appreciate.

    It takes loads of research and ‘Tuition Fees’, as you rightly coined it, to start becoming 0-0, on a monthly basis; leave aside account getting into Green.

    When you achieve net 0-0 on a monthly basis, that’s the first sign that you have started progressing in the right direction now and your strategies are working.
    It’s a test of perseverance…

    Traders should also research own past year’s Trading P&L and find out which stocks have yielded higher positive gain/ per Quantity traded.
    Prefer to trade in these stocks as their movement probably gels better with your trading strategy and you are likely to become positive soon.
    Above is my personal observation/ opinion.
    Thanks and Regards.

  • These are the words of the wise.. Exposing what is the truth and reality.. Rather than feeding “sugar coated preaching” to attract audiences.

    It’s true that trading is only for those who could assumes accountability. If you are learning from trading thats better. But if it affects your entire environment negatively, you should quit right away. And start online business, online jobs, VA’s and the like.. Because trading is a big waste of time without a proper education..
    Thanks Rayner..
    God Bless you

  • Rayner,
    No doubt You are the best mentor I encountered throughout my online search. You are smart, you tell it as it is and it seems to me that you not only for the money but really try helping people to be better traders. Kudos!
    Amir

  • You are the best trading mentor I have ever come across. I remember you gave me the courage and confidence to place my first trade and things went well since then. You’re my all time referral to anyone who wants to learn more on trading. Thank you so much Rayner for sharing. More blessings.

  • I had given up live trading twice due to losses. 6 months later I got back in and felt better for about 12 months. Then account blew out. Stopped again for 6 more months. Now trading again and consistently making 6% per week over the last year. I agree that when you’re frustrated take a break.
    Love your channel. Keep up the great work.

  • When I started trading it was difficult to make a profit, so the thought of giving up always creeped on me. As Rayner said by focusing on market processes, what’s needed for me as individual in the market then I saw improvement in my thinking capacity and trading accounts.
    I will like to pass my many thank yous because without you blogs and videos I would have gave up long time ago

  • For me, I have been trading for more than 5 years now and still struggle to make consistent return till now. Your words is really truthful and encouraging. What really makes me keep on going until now is my own perseverance and I only have i thing in mind” If I give up, I will lose everything to the market”. This is the only one thing that drives me to stand until now. Though I admit that it is very hard feeling when we see the account is down. But after taking up your course, I understand what I have done wrong in the past and will try to master and remember all the lessons you have shared and taught in your syllabus. Down bottom in my heart, you are the only recognized guru so far I salute on.
    Thank you Rayners and gold blesses you abundantly.

  • Thank you Rayner,you are my Professor in forex,as newbie I am,you are saving me from collaterial suicide.When I loose and want feel blue,I remember most of you advise and calm down.

  • I learned a lot.. Thank you for sharing this.. I will not quit trading but i will just trade if there is high probability trade set up. Patience is a skill for me..

  • This is a well written article, I think a lot of traders refuse to throw in the towel because it is mentally difficult to accept failure.
    I am 25 years old, I have been trading for 2 years now, I have given 40,000CAD to the market. Everyday I trade because I believe in the opportunities out there to make crazy returns, yet time and time I fail to capture the home run winning trades.
    I cut my winners early, I cut my losers well beyond my stop loss.
    I keep on saying I am one step away from a home run trade, yet mentally I can not get myself to hold onto the winning trades.
    I think one way to get myself out of the repetitive mind f**k rut is to really follow your trading strategy. If you follow your trading strategy and still lose money, then your strategy needs to be refined. If you did not follow your trading strategy and lose money, then admit you are a idiot and no better than a degenerate gambler.
    I will be turning 26 next month, a lot of my friends are going to be lawyers and engineers. I am in a profession that is able to grant you everything you desire, yet why am I so afraid to grasp what I deserve. Is it because of bad strategy, is it because of lack of patience, or is it because I am chasing rainbows.

    • Thank you for your honesty and sharing, DCL.

      You’ve made good points about following your strategy and not following your strategy.

      I believe you have grasp the fundamentals of trading and what’s left to do is execute according to your trading plan and let the results speak for itself. Best!

  • Your words ring true. I am questioning whether I want to continue to trade. I make some $$$ and then lose it. I need to take a step back and take a break. Been trading for 5 years and this is the first time it has actually sank in that I need to make sure I am trading as a want, not a need.

  • Have been in it for quite sometimes and when i make losing trades continuously think that if i control my emotion and rectify the small mistakes in my trading may increase winning percentage, become a profitable trader and that is it. If people earn from trading why not me? That keeps me going.

  • Well, though financial status is the base factor in trading I feels that if one comes up with a strategy that can win a trade, follow the rule, manage emotions and discipline oneself chances of making money is there. I believe my ‘friend’ Rayner started there too. What did you do ‘my friend’ to get where you are? Self confidence is an issue too.

  • Thanks for your great insight on the success to trading. I agree that psychology is a great determinant to successful trading and personally I have messed up myself severally despite the great wealth of knowledge and skills I possess as far as trading is concerned. I have 5 years trading and doing part time jobs but I have never been consistently profitable. Most of the mistakes I make relate to discipline. On the part of the world I live in, jobs are scarce and sometimes sources of earnings like forex trading become very key to success in life: therefore, would it be advisable to horn the trading skills and start trading even with small capital rather than search for jobs which are hard to come by!

  • hi rayner.. another great stuff right there!
    it’s been a great blog since the first time I know and read your posts dude.
    but when it comes to picking a stock or currency you want to trade, what method are you using bro?
    it will be great if you can write another blog for this stuff. thanks man!

  • This article is so about me. I started trading last year May. I was so perplexed by debts, unemployment and poverty. I tried it and quit several times. The thought of getting rich fast through trading was a push factor. I lost so many times and grieved. Well, I’m still struggling to get this right but I feel more at ease because I found a job and a side hustle. I just hope my mental easeness will help me get things right.
    Thanx Rayner, you nailed it

  • Thank you Rayner for this wonderful piece,your articles and videos have really sharpened and improved my trading psychology
    I have actually thought of quitting a number of times but when I watch your videos and read your articles it gives me the reassurance that I’m on the right track
    Making us realize that trading is not a get rich quick scheme is one of the best thing I’ve learnt so far that we need time for our edge to play out.
    God bless you mightily,what you’re giving out for free is worth thousands of dollars.
    Thanks
    Cheers

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