When is The Best Time to Quit Trading?

“When should I quit trading?” 

If you’re a struggling trader, indeed, this question has crossed your mind. 

Well, there are times when it is better for you to quit trading. Not everyone is meant to be a trader. To be honest, trading is hard, and it takes many years until you can be a profitable trader.  

Thus, in the following, we will bring you a few things to consider to see if it is right for you to quit trading or not. While you go over the list, be honest with yourself. 

1. Having Financial Difficulties

This is something that needs your attention. If your daily needs can’t be met, you’re in debt, or you can’t afford to trade anymore, quit immediately. 

Trading is not like a job that pays you a fixed income with a fixed payout every month; it does not work that way. There may be months when you don’t make any money at all. You may even lose more than you invested. 

If you still attempt to go for trading while you know you are struggling for funds, please stop it. Don’t even think about borrowing money to trade; it’s the worst thing you can do. That is financial suicide, and you know how dangerous it can be. 

2. Poor ROI (Return On Investment)  

Say you gave yourself two years and left your job to become a full-time trader. You have 730 days to try and make trading work for you. But, at the end of those two years, if you see there is no improvement, quit!  

Hypothetically, if you have been paid US$25 an hour in your previous job compared to US$5 per hour when you trade, something needs to be worked on. In terms of ROI, it doesn’t make sense, and this is what we call “poor ROI.” 

You should give this some thought; if you value freedom more than most people, working as a full-time trader may be for you. But if you value time and money, consider the ROI.  

Another option is that you can still work full-time and then trade part-time.  

Again, to become a profitable trader, you will need to take several years to ensure the “game” is on for you. For instance, if you have not made any progress and your equity curve is still steadily pointing downwards, you are failing.

3. When Your Mental State Is Not Right 

Trading is a mental discipline game. Those who can keep their emotions under control – are the winner! 

We know what happens to those who can’t. But no matter how disciplined and controlled you become, “those days” will always be.  And it is too bad that mental state is so underappreciated. The mental edge and market edge are complementary.  

Even if you have the best trading strategy available, you risk having a wild ride if you cannot act when necessary or maintain perspective when you lose. If you are not paying any attention, quit!  

So, it makes sense why this field has such a high failure rate. However, if you are serious about trading, you should do what is necessary rather than believe that trading is a quick way out of your current situation. 

4. Trading Excitement Hurts You Too Much After Losing Continuously 

Another dangerous scenario would be a losing streak. If you have lost the last three or four trades, you will lose your trading excitement, hurting you too much.  

Now, you are in a high-alert situation. Whatever the case, if you are not feeling up to the task of trading, then don’t and quit! 

There is no rule that says you must trade today. Even if you have an A+ set up right before you, taking a break from your charts may be a good idea. It usually comes in handy if you are not feeling up to the task. 

After a losing streak, taking a break is one of the best things you can do. When you return, try risking half your standard position size until you regain confidence. 

Final Words

To wrap up, here is what you need to know:  

1) As a trader, you need to know when to trade and when not to. It will help keep your capital safe when conditions are volatile or markets are illiquid and allow you to capitalize when the time is right. 

2) Don’t think that you can’t come back later just because you quit now. This opportunity is always open to you.  

3) When you are more energized and recharged, your mental capital returns to its optimal level. Or maybe you strike it rich and can spare a few thousand dollars. That is a slight chance for you to trade the markets. Then, by all means, come back to this opportunity.  

That’s it! 

We will be happy to hear your thoughts

Leave a reply

PIP Penguin