The markets were volatile over the past couple of months, and I was kicked out of most of my positions at a loss. But the reality is that every trader will run into a string of losing trades at some point. And this streak can be long and impact one’s confidence, which is problematic because you need confidence to trade effectively. Without a good mindset and a good mental model, it can be challenging to get your confidence back and trade well again.

The recent losing streak sucker-punched my confidence momentarily. I questioned myself as a trader and my abilities for a moment. But what brought me back was remembering my past victory back in 2020.

I started trading equities and ran headfirst into the tail end of the 2020 bear market and its volatility. My discipline to stay with my trading process kept me going. This reminded me why my trading strategy is profitable – an important reminder especially during tough periods.

Trading strategy in the rough

My trading strategy is simply looking for diamonds in the rough. But navigating the rough can be tough when you’re not finding that precious stone. I suppose you could call that a bruised ego. However, going through the rough is part of the gem-finding process. What makes my strategy profitable is the profits coming from the few gems I find. They pay for all the costs (the losses) and leave me with some.

When I’m trading I’m looking for long-running trends which are few and far between. There are a lot of false starts, which I cut fairly quickly as soon as they show signs of not running hard. But when I do find gems I hang onto them for dear life and add to those positions to enhance the returns, making them profitable.

Looking back at my experience in 2020 reminded me of that. Which helped me get back to trading with a stable mind again, knowing that with patience I will find the gem that pays the bills. I might already have one without knowing it – survival of the remaining positions is a good signal.

Tough times are commonplace in a trader’s life. They’re caused by different reasons and come in different forms. Part of a trader’s job is navigating the tough times. Learn from them and use the lessons to navigate upcoming storms. You’ll soon reach a point where good times and tough times are simply everyday times in your journey.

Traders share a peculiar characteristic: they’re fiercely competitive, but only with themselves. In practice this means that they see every outcome as an opportunity to learn, and they’re brutally honest about both their failures and successes. This also means that they’re hungry for knowledge. They don’t sleep easy with unanswered questions. And they’re seldom satisfied with just one answer.

Njabulo Nsibande is a founder of Village Trader, and Sakha Ingcebo investment club. His interest in trading began in 2016, alongside a rash of Instagram ‘fx traders’…

Find him on Twitter: @njabulo_goje.