Anyone had massive drawdown before?

[Warrior4g]

you are searching too deeply for answer that is abundantly clear.
you simply let a loss get too big. yoy can hypothesize all day and all night about how you deviated from your discipline or took your eye off the ball ect...we've all been there(i sure have been) and irs a bad feeling that can be very damaging. but again,its quite simple why you took such a big hit,you let a small loss turn into a big loss. sounds like you may have held overnight and averaged down.
my ruke is simple,if i enter a position and does not go in the intended direction(i give the trade some leeway) then i bail,no questions asked. i will re establish a position if it starts going the intended way but in no way do i hold just because i say its supposed to move one way or another.

 

[nlimit1]

on how much money you started with... if yuo started with 5k and lost 2.5k well thats not so bad but if you started with 100k well thats a different story

 

[mosheobrien]

It happened to me before. I was out of sync with the markets. Liquidated everything so I can start fresh. Then, taking small bites, don't try to make it all back quickly. It can be done, but needs a lot of patience.

 

[mosheobrien]

It happened to me before. I was out of sync with the markets. Liquidated everything so I can start fresh. Then, taking small bites, don't try to make it all back quickly. It can be done, but needs a lot of patience.

 

[sarahs]

if u have any money left, just suck it up and wipe the slate clean

 

[Kaempferrand]

2002 - 2003 ..... a 48% drawdown. Learned a great amount during that period. Then I broke even for the next 8 months. Afterwards I finally somehow got it and became consistently profitable each month. Lesson learned is that for me once I am 6% down for the month.... STOP TRADING for a week or two and take a nice vacation.

 

[brocklanders]

Quote from Kaempferrand:

Lesson learned is that for me once I am 6% down for the month.... STOP TRADING for a week or two and take a nice vacation.

Great advice. To anyone struggling through a drawdown, this is probably the best one piece of advice to save you from a complete blow up. Maybe 6% isn't your magic number but having some limit per month is vital to survival.

 

[pipboy]

Dont worry. If you have a good pair of bollocks you will get back on track. You may want to retune your strategy.

 

[Lucrum]

Quote from turkeyneck:

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

Quote from Thunderdog:

Yes. Slowly.

Dito.

Or maybe I should say SMALL and slow.
As in trading small size. Assuming you have a strategy that works in the first place many big draw downs are going to be a result of over leverage or letting a lose run away without taking any action (hedging/liquidation) to deal with it, or both. Personally I think trying to hurry up and get it back is probably the worst thing you can do. It will lead to more over leveraged positions which often leads to non objective observations of market conditions all because you "need" to make home runs to get back to being "whole" again. I do much much better with small positions and reasonable easily achievable goals. It will take longer but it's also more likely to happen as well, as in getting back to where you were. Some individuals may also benefit from some time off as well.

 

[megabucks]

drawdowns are unrealized. so your stop loss was 50% of entry and you covered ? or better question is why didn't you run a tighter stop like at 2% ?