What Is Traders’ Block?

The term “writers' block” is often used to refer to a situation wherein a writer is unable to come up with new ideas or content. In forex trading, one might go under a “traders' block” in coming up with new trade setups. This can happen under any circumstance, whether you're in the middle of a…

The term “writers' block” is often used to refer to a situation wherein a writer is unable to come up with new ideas or content. In forex trading, one might go under a “traders' block” in coming up with new trade setups.

This can happen under any circumstance, whether you're in the middle of a terrible losing streak or even after enjoying a good winning streak. There will be cases when a trader also freezes in the middle of a trade, unable to make a decision on whether he has to cut losses or book profits by closing early or if he will be better off holding on to the trade.

These situations can be a result of over-analysis or possibly trading burnout. Let's take a look at how traders' block gets diagnosed in these instances.

The former involves facing too much information that one is unable to put things in perspective and formulate a valid trade idea. A trader might find himself simply staring blankly at the charts or economic calendar but unable to make sense of the data.

The latter has to do with too much stress or pressure at work, whether it's in one day's job or in actual forex trading. This can also lead a trader to freeze in his decision-making processes, as he could be dealing with an overload of emotions at this point. This can also end up clouding one's judgment.

During these scenarios, it might be better to clear one's head and refocus before taking any new trades. Some traders opt to take a quick vacation in order to get a fresh perspective on the markets afterwards. Others try to go back to the basics and review their trade strategies to figure out if those are still appropriate for current market conditions.

The problem with undercoming merchants' block is that one might struggle too much in order to over it. However, this may do your account more harm than good if you trade under heavy stress or without a clear understanding of what's driving price action.

In a nutshell, you do not have to force yourself to come up with a trade immediately when you think you are passing traders' block. Writers who undergo a similar situation do not pressure themselves to come up with an essay or a new novel instantly, as they know that the product will not exactly be the best under the current circumstances. Instead, give yourself and your mind a break, as you try to move on from what's holding you back in coming up with new ideas.