2 Exercises to Break Out of a Losing Streak in Trading

Let me ask you something, {{first_name}}.

Have you ever had a losing streak where you told yourself, "Okay, that's it. I'm going to slow down, follow my rules, and trade clean"... and then you sat down at the charts and did the exact opposite?

You took trades that weren't your setup, sized up when you should have sized down, and moved your stop... You were watching yourself do it, but yet you still couldn’t stop no matter what you tried. That is something I see all the time in trading and it has nothing to do with being undisciplined.

What it is, is a nervous system that has gone into full threat mode. And once that happens, the part of your brain you actually need to trade well is no longer available to you.

I struggle when I hear other traders say “just be more disciplined” or “follow your rules” because if it were that simple, we’d all be doing that. What’s going on is a deeply ingrained survival mechanism, that you have no control over, now has complete control over you. And with every loss you take, the grasp it has on you gets stronger and stronger.

Here's what nobody is telling you about losing streaks.

When most people talk about losing streaks, they treat it like a motivation problem. "Get back on the horse." "Trust your edge." "Just be disciplined."

And I get it… That advice sounds correct and easy to implement, but it doesn’t account for what is actually happening inside your brain and body when losses start stacking up.

When you take repeated losses, your brain doesn’t just feel bad about it. Your brain registers it as danger.

Real, physical danger.

Meaning the same part of your brain that would fire off if you were being chased by a predator is firing off when you see red on your P&L.

This is called your amygdala and it's your brain's alarm system. When the amygdala is under chronic stress, like the kind that comes with a losing streak, it becomes hypersensitive to everything and starts treating neutral things as threats.

A red candle when you're going long…

A slight drawdown…

Even just opening the platform starts to feel like walking into a room where something bad is going to happen.

And when that alarm goes off, your brain shuts down your prefrontal cortex and restricts all blood flow to it. This puts you on autopilot, conserves energy (due to not having to make any decisions), and gets you back to a safe state as soon as possible.

The problem is that your prefrontal cortex is the part of your brain responsible for logic, planning, rule-following, patience, and good decision-making. It is literally the part of your brain you need most when you sit down to trade. And during a losing streak, when you need it more than ever, your brain takes it completely offline because every loss amplifies the fear that another loss will happen. And when that fear keeps amplifying, your survival brain is going to be quicker to take over each time.

This is why you break your rules after saying you won't. This is why you can't remember your plan mid-trade. This is why you spiral into "just one more entry and everything will be fine." It has NOTHING to do with your discipline abilities. I wish I could scream that from the rooftops for everyone to hear.

What’s going on is that your brain is trying to protect you from what it thinks is a threat. And when there is a threat involved, the brain refuses to let you think logically because it can cause hesitation, which can put you in further danger.

There's a name for what this does to your trading.

In the therapy world, we talk about something called the Window of Tolerance. It's a concept developed by Dr. Dan Siegel, and it describes the zone where your nervous system is calm and regulated enough to think clearly, feel your emotions without being controlled by them, and respond to challenges instead of reacting to them.

Inside that window, you are alert but calm, you can wait for your setup, and a loss feels like feedback, not a catastrophe. When you are in this window, you can stick to your plan because your brain is actually online and working for you.

Outside that window is a completely different story.

When you go above that window, that's hyper-arousal. That's when you feel the urgency, the anxiety, the "I have to do something right now" feeling. That's when you chase trades, revenge trade, overtrade, and make all the decisions you said you would never make.

When you go below that window, that's hypo-arousal. That's when you go numb, freeze at the screen, blow your account almost on autopilot and barely feel anything. You avoid the charts entirely.

So how does this apply to losing streaks?

Losing streaks narrow that window. Fast. The more losses you take while already dysregulated, the smaller your window gets, and the easier it becomes to fall out of it completely. Outside of that window, you start trading from distress, make reactive decisions, lose trades due to silly mistakes. And all of that confirms the fear your brain already had, causing your window to shrink even more. And now you are stuck in a loop that has nothing to do with your strategy.

And then we pile shame on top of it.

This is the part that really gets me. Because not only are traders dealing with the neurological fallout of a losing streak, they are also talking to themselves like they are the problem.

"I know better than this. Why can't I just stop? What is wrong with me?"

I need you to hear this... Shame is not a regulation tool. It never has been. “Tough love” and negative self talk are SO common. I hear it all the time. But {{first_name}}… when you talk to yourself that way, with shame and disgust, you are not motivating yourself to do better. You are adding more threat signals to a nervous system that is already overwhelmed and keeping yourself stuck in the very state you are trying to get out of.

I spent years as a therapist watching people try to shame themselves into change. I myself have spent years trying to shame myself into change. It doesn’t work. Not in a therapy office, not in life goals, and not at a trading desk. You will always fail if your motivation behind wanting to succeed is shame.

The loop looks like this.

And the cycle just keeps going.

You’re stuck in a losing streak because your nervous system is doing exactly what it was designed to do when it perceives danger. And you cannot out-discipline a dysregulated nervous system. There’s no other explanation for it. That’s simply neuroscience.

So what do you actually do?

If you can’t think your way out of a losing streak, and you definitely can’t trade your way out of one while your brain is still stuck in threat mode, the losses get in your head and they stay there, right? Every new trade feels heavier. Every decision feels impossible and you start second guessing the setup you would have taken without hesitation last week. That is exactly what happens when your brain gets locked in a loop of replaying losses and scanning for the next threat.

The only way out of that loop is through your body first, not your head. Your body.

When you shift your attention to physical sensation, something really important happens…

You see, your brain is physically unable to process sensory input and emotional threats at the same time. It is physiologically impossible because your physical senses live in your logical brain and emotions live in your survival brain.

So when you give your body something to focus on, you are forcing your brain to interrupt the threat loop. And once that loop breaks, even briefly, your prefrontal cortex has a chance to come back online. That is the part of your brain that remembers your rules, trusts your setup, and can actually evaluate a trade clearly.

That is the whole goal here. Not to feel better, but to get your trading brain back.

Here are two exercises that do exactly that.

Exercise one: Shake it off.

This one is going to sound strange, but I want you to do it anyway.

Stand up and shake out your arms, your legs, your shoulders, your whole body for about 30 seconds. Let it be weird and loose and uncoordinated...feel silly with it. That’s the whole point.

Because when your brain perceives threat, your body stores that stress energy like a coiled spring. It is designed to be discharged through movement, the same way animals shake after escaping a predator. But most traders just sit at the desk and absorb loss after loss with nowhere for that energy to go. So it builds up, and that stored physical tension is part of what keeps your brain locked in threat mode.

Shaking discharges it physically. When that energy leaves your body, your amygdala starts to quiet down, the alarm signal weakens, and as that alarm fades, it allows your prefrontal cortex to come back online.

What that means for your trading is that you are not just returning to the charts calmer. You are returning with the part of your brain that actually knows your rules, recognizes a real setup, and can tell the difference between a good trade and one that just feels urgent. That part was not available to you five minutes ago. Now it has a chance to be.

Exercise two: The butterfly tap.

Cross your arms over your chest and alternate tapping each shoulder slowly. Left, right, left, right. Keep it slow and rhythmic. Do this for about a minute while you breathe normally.

This comes from EMDR, which is a trauma therapy that uses bilateral stimulation, meaning left and right alternating movement, to help the brain process and regulate. That same left-right pattern activates both hemispheres of your brain simultaneously. And when both sides of your brain are engaged, it pulls you out of the emotional reactive state and reconnects you with your logical thinking brain.

Think about why walking helps you think more clearly. It is the same exact mechanism we’re using here. That left-right movement is deeply regulating and it works fast.

After you do this, you are not going to feel euphoric and you won’t feel like a brand new trader. What you are going to feel though is a little more grounded and a little less like the walls are closing in. And that is enough to start thinking clearly again instead of reacting from fear.

Now here is the part that matters most.

These exercises work. But I need to be really clear with you about something, because I think it is one of the most important things I can say.

Regulation does not make the right decision for you. It just gives you access to the part of your brain that already knows what the right decision is.

You can do both of these exercises, feel more regulated, and still take the wrong trade. Because sometimes the trade that feels right after regulation is not the same as the trade that is right according to your plan. Your nervous system settling down is not permission to jump back into a trade. It is permission to think clearly enough to ask yourself whether you actually should.

So before you go back to the charts, I want you to ask one question: “Am I about to take this trade because my setup is actually there, or because I want to make the money back?”

If the answer is the second one, you’re not ready and that’s totally okay. Walk away and come back tomorrow. A regulated brain that makes the wrong decision is still making the wrong decision.

The goal with these exercises is not just to feel better. The goal is to feel better and then use that clarity to make the right call.

There is a third exercise that ties all of this together. It’s the one I see traders skip the most and it is the reason the first two fail to stick long term. I am covering it in full on this week's podcast because it takes a little more explanation to actually set up correctly, and I want to make sure you walk away knowing how to use it before your next losing streak hits.

You can listen here.

Here's what I want you to take away from this.

Losing streaks are going to happen. Every trader, profitable or not, goes through them. The difference between traders who survive them and traders who don't is not who has more discipline or more willpower. It's who understands what is happening in their body and has a plan to come back from it.

You are not someone who just doesn't have what it takes to make it in trading. You are a human being with a nervous system that is responding exactly the way it was built to respond when things feel unsafe.

The work is not about pushing through that. The work is about learning how to regulate, so your brain can come back online and actually support you instead of work against you.

If this hit home for you today, forward it to someone who needs to hear it. I promise they do.

Talk soon,

Sarah