Changing how you interpret a situation so the emotion itself changes - reading a stop-out as the cost of information rather than a personal defeat.
Reappraisal works upstream of feeling. If a loss means you are failing, the emotion is shame. If the same loss is one expected outcome of a positive-expectancy process, the emotion is mild and passes.
The reframes that hold up are ones you actually believe, which is why they have to be grounded in real numbers. A trader who knows their system loses six times in ten can reappraise a losing streak honestly. A trader with no records is just telling themselves a story, and the story will not survive the fourth loss.
Rehearse the reframes when calm and write them where you will see them. Reappraisal invented during a drawdown tends to arrive as rationalisation instead.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Expectancy: the average trade. Forty trades sorted by outcome: 24 small losses and 16 larger wins. Weighting each side by how often it happens gives the average result per trade, marked here by the dashed line at +$120.
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