Being ‘Whipsawed’ in Trading

Posted on Nov 19 2015 - 4:49pm by Dan

Trading, in essence, is a psychological game.

Your enemy in trading … is ‘you’.

My enemy in trading … is ‘me’.

Therefore, it’s beneficial to discover ways to defeat our own natural base inclinations that could, in the end … destroy us.

One market ‘scenario’ that many traders allow to unnerve them, is “the whipsaw“.  Let’s say that a trader is buying, or is long.  The market will then sink, move against them, and stop them out.  That same market, will then move in exactly the direction that the trader believed it would happen and rip 20 handles higher.

The trader was thus ‘whipsawed’.

It happens.

To trade profitably, you must never allow this to unnerve you.  

The markets have been, and will always continue to be, random noise, that we attempt to navigate profitably.  Whether you trade professionally, or are brand new … you will encounter situations in which you are ‘whipsawed’ by the market.

So … at the outset, we stated that a trader must learn ways to defeat our own natural base inclinations that, in the end … destroy us.  Sow how does that apply here?

You must be perfectly “ok” with being whipsawed

It is inevitable.  It happens to me, to this day.

There is nothing you can do to stop it from happening.

You must simply learn to accept it, and not let it bother you.

Successful trading, is learning to process discomfort.  Do not allow “whipsaw” situations, to disturb your ability to take the next trade.

Because in the grand scheme of things, one trade is meaningless.  

There will always be, another boat ..

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