Anyone had massive drawdown before?

[nyxtrader]

Quote from SWhiting:

You are so correc t, ammo.

I went into Weds. with a bullish opinion and lost my ass. Ironically, early in the loss I considered buying some Put options and getting out with a small loss: I ended up doing neither.

This affected me the next day also as I exited a profitable trade at a small profit even though my system said to 'stay in'.

I think I broke most of the rules in the book over the two day period.

I am not saying any of this to brag or anything but I consider myself one of the best out there AND believe me I have been there. This business is a mind game so to speak and it has done wonders on me. If you have a game plan that is making money, don't steer away from it. You are going to have trades where everything is set up for a perfect entry and that SOB goes the other direction.

We sure don't learn much by making money, it is losing money that teaches us. So on your bad trades go back and look at why it went against you. The other thing is this, you have to cut your losses and not let yourself take too much pain. Get out of bad trades, don't hold them. Always have an exit plan and stick to it. Sometimes it will SUCK because you were right but it tagged your exit and ripped in the direction you had hoped. On the other hand it prevents this type of loss.

I am sure some will disagree but you HAVE to understand what is going on. 80% of this game is in the mind. Focus on making good trades, don't worry so much about the PnL.

As far as rules, we all break them from time to time.

 

[mgabriel01]

Quote from nyxtrader:

I am not saying any of this to brag or anything but I consider myself one of the best out there AND believe me I have been there. This business is a mind game so to speak and it has done wonders on me. If you have a game plan that is making money, don't steer away from it. You are going to have trades where everything is set up for a perfect entry and that SOB goes the other direction.

We sure don't learn much by making money, it is losing money that teaches us. So on your bad trades go back and look at why it went against you. The other thing is this, you have to cut your losses and not let yourself take too much pain. Get out of bad trades, don't hold them. Always have an exit plan and stick to it. Sometimes it will SUCK because you were right but it tagged your exit and ripped in the direction you had hoped. On the other hand it prevents this type of loss.

I am sure some will disagree but you HAVE to understand what is going on. 80% of this game is in the mind. Focus on making good trades, don't worry so much about the PnL.

As far as rules, we all break them from time to time.

I agree -
and the dog in the clouds we sometimes see occurs when a perfectly good setup gets stopped out by 1 point - then the market moves where we expected it to go

makes ya think somebody out there is consipiring against you
but if you track the trades diligently ---- the odds of success will become more clear

 

[Johno]

" Thunderdog

Longer than I would care to admit. I reduced my trade size to a small fraction of what it had been. When I first started trading, I made a bit of money, became somewhat confident, and then proceeded to lose a lot over a fairly short period of time. As for my "mojo," I still have less confidence now than I did when I first started and when I was far more ignorant and naive than I am now. On the one hand, I suppose it's good that I lost the money that I did because it made me more humble and forced me to improve my technique. On the other hand, I'm like the cat that always raises its back when it sees a stove. I'm still looking for the middle ground."

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Thunderdog, you're certainly no Robinson Crusoe! Plenty of us have been there one way or another!

Do you recall any thoughts or comments you made just prior to your awareness expansion occuring? Like when my broker voiced his concerns regarding the bucket load of index options [some spread some naked] I'd written, I can still hear myself saying "It's not a problem , if they look like getting into trouble I'll just hedge them whilst I reduce my position" within days the markets exploded. It took a month of constant trading and margin calls to close out my positions and salvage what little I could. [ so much for confidently managing the risk] As a consequence I hold a very different perspective of risk these days.

Strange as it sounds, the older I get the less I seem to know!

 

[Thunderdog]

Quote from Johno:

...Strange as it sounds, the older I get the less I seem to know!

It certainly seems that way, doesn't it? On the plus side, there is something to be said about recognizing the limits of our knowledge and respecting what we don't know. (Outside of the trading arena, the Bush administration serves as a vivid cautionary tale of bluster over brains.)

 

[ammo]

Quote from Thunderdog:

It certainly seems that way, doesn't it? On the plus side, there is something to be said about recognizing the limits of our knowledge and respecting what we don't know. (Outside of the trading arena, the Bush administration serves as a vivid cautionary tale of bluster over brains.)

t dog, it may have been expensive but u had to learn a lot about hedging and scrambling with options, are u still trading options if so ,index?, spy or spx?

 

[buylo]

Quote from turkeyneck:

Say 50%? How did you trade yourself out of the hole with a fresh start?

It depends. IF you have been trading well up until now and IF you took a hit on a trading error, you have to battle psychologically through the error and continue.

If it is overall poor trading, then cut your size, write all trades down with reasons, and review at end of day.

Lots of rumors these days. They rule the markets. Reminds me of when the Iraq War went off. Bin Laden rumors every 5 minutes!

 

[Thunderdog]

Quote from ammo:

t dog, it may have been expensive but u had to learn a lot about hedging and scrambling with options, are u still trading options if so ,index?, spy or spx?

You may have me confused with someone else. I have never traded options, and my idea of hedging is exiting. Although I previously traded a few different futures markets, for the last several years I have limited myself to indexes. I principally trade NQ.

 

[ammo]

Quote from Thunderdog:

You may have me confused with someone else. I have never traded options, and my idea of hedging is exiting. Although I previously traded a few different futures markets, for the last several years I have limited myself to indexes. I principally trade NQ.

yeah, i went back and it was johno who started his reply quotin you

 

[Johno]

Hi Ammo, I'm assuming you are looking for a reply but just got the wrong poster.

The short answer regarding hedging and manouvering is "yes I have". Although any skills I may have, pale into insignificance when considering the most important lesson I received. Any business/strategy a person becomes involved in must only be undertaken after careful consideration of the current and probable future environment!

Manage risk before it becomes an issue!

Sun Tzu points out that it is always preferable to avoid engaging superior forces unless there is absolutely no other option.

Best Regards

Johno

 

[Indrionas]

Quote from Thunderdog:

Longer than I would care to admit. I reduced my trade size to a small fraction of what it had been. When I first started trading, I made a bit of money, became somewhat confident, and then proceeded to lose a lot over a fairly short period of time. As for my "mojo," I still have less confidence now than I did when I first started and when I was far more ignorant and naive than I am now. On the one hand, I suppose it's good that I lost the money that I did because it made me more humble and forced me to improve my technique. On the other hand, I'm like the cat that always raises its back when it sees a stove. I'm still looking for the middle ground.

This is so familiar