Recently one of our guys was struggling. His Luger’s fund (money donated by our desk for a celebratory meal at Peter Luger steakhouse http://www.peterluger.com/) jokingly(?) turned into Mike’s Survival fund as you can see from the picture.

Trading slumps as they are usually known, happen to the best of us. To me it is just a psychological barrier that slowly erodes our confidence and ability to execute good trading plans. With that said, below is my six-step recipe to get you back on track:

1. Cut your tier size temporarily: It is important to take the P&L out of the equation and focus on the fundamentals. You need to go back to finding the plays that make you money consistently, hopefully your trading journal should give you further insights.

2. Focus on making one good trade: You need to put the past behind you. Remember that past trades have no effect on the trade at hand. Focusing on making one good trade helps you gain confidence regardless of the outcome of the trade.

3. Watch tape of a previous one solid trade: Revisit your archive of recordings and find a tape of one good trade you have made in the past. Whenever you take a hard beat or feel like you are not trading well, go back to this video so you remember what it feels like to make a good trade.

4. Do a couple more visualization exercises: I can’t emphasize enough how useful these are. Specifically, you want to do exercises that bring thoughts of confidence. Visualize making a chop, then making another chop, then making another one.

5. Establish a set of progressive goals: Slumps can put a dent on your trading account and it is easy to try to make it all back with big plays. You have to remember that it is all about playing some defense until you can get your confidence back on track. Establish goals for the day/week/month and stick to them.

6. Sing “Dont Stop Believing” by Journey. Listen to it on the train or on your commute to work. It will be a healthy reminder that you can do this job. 🙂

While most of these seem silly exercises remember that the point is to boost your confidence. I am a huge believer in Psycho-Cybernetics (http://www.amazon.com/Psycho-Cybernetics-New-More-Living-Life/dp/0671700758). So if you find yourself struggling for a bit, consider the things mention above. I know they have worked for me. And for the record Mike’s survival fund soon will be again the SMB’s Luger Fund. Chop!