Best Way To Deal With A Large Drawdown

[Redneck]

Am I right in thinking that you just trade off of charts using technicals? trendlines etc?
I see that you almost exclusively trade Facebook? (FB) Do you feel as though you could be as consistent if you were forced to trade somthing else? Say the NQ or an FX pair for example?
Regards.

Certainly willing to respond.., but out of respect to the OP - he needs to agree

This would be way O/T..., and imo..., I've already disrupted his thread way too much

Otherwise we can can take it to another thread / PM / carrier pigeon - or whatever works

OP - what say you

RN

 

[Fundlord]

Certainly willing to respond.., but out of respect to the OP - he needs to agree

This would be way O/T..., and imo..., I've already disrupted his thread way too much

Otherwise we can can take it to another thread / PM / carrier pigeon - or whatever works

OP - what say you

RN

Im all for people providing value, go ahead.

 

[SwingToWin]

RN you have a good reputation on the board, but I can't take you serious at all if you say that drawdowns are not neccessary, should be avoided and the goal is to only make money.

sure that's the ideal scenario. but it's far from reality, really.

So, you make constant winnings and never have a drawdown? Great! I'll give you all my chips, just tell me your bank adress and I'll wire the funds to you. Thanks.

 

[Turveyd]

RN you have a good reputation on the board, but I can't take you serious at all if you say that drawdowns are not neccessary, should be avoided and the goal is to only make money.

sure that's the ideal scenario. but it's far from reality, really.

So, you make constant winnings and never have a drawdown? Great! I'll give you all my chips, just tell me your bank adress and I'll wire the funds to you. Thanks.

RN you have a good reputation on the board, but I can't take you serious at all if you say that drawdowns are not neccessary, should be avoided and the goal is to only make money.

sure that's the ideal scenario. but it's far from reality, really.

So, you make constant winnings and never have a drawdown? Great! I'll give you all my chips, just tell me your bank adress and I'll wire the funds to you. Thanks.

I suspect he's a fraud and that's exactly what he is after sadly, why else slow a fake P&L like that.

 

[Redneck]

RN you have a good reputation on the board, but I can't take you serious at all if you say that drawdowns are not neccessary, should be avoided and the goal is to only make money.

Thanks.

Then by all means - don't

I really don't care

RN

 

[Redneck]

Im all for people providing value, go ahead.

Thanks FL

I respond later this evening

As for my response providing any value - who knows..., and only each reader can determine

RN

 

[Redneck]

From reading a few of your posts, I can see that you are very much into the psychological aspects of trading, and getting them parts right.

I am keenly interested not only on my own psychology;

Keeping my head on straight / ego in check / opinion in check / unbiased / centered / flexible/ detached / focused / respectful of risk (not scared of it - rather respectful)/ clear on my goals..., intentions..., actions / completely accepting of the uncertainty / remaining relaxed

But also in the psychology contained within the mkt (which I willingly and unabashedly exploit)

imo -> behavior and psychology are synonymous

Also imo -> trading is 3 to 5% technical..., 95 to 97% psychological

These day I spend exponentially more time / energy..., and money on me..., than I do my trading tools

I can take my losses like a robot,

We're human - not robots

Traders, by nature, are ubber competitive - no real competitor likes losing

But losing is a necessary..., and normal - part of trading

Just something to ponder - it doesn't pay to shield our self from any aspect of this business


mkt (rather inner our self) will pick up on these hidden jewels and proceed to beat us over the head with it / them

mkt by its nature - exposes and lays bare all or our deficiencies / weaknesses / insecurities - then affords us the perfect environment for us to abuse our self mercilessly and unceasingly with them

I can be patient and wait for my setups,

I don't 'revenge trade',

I can let my profits run .

These are all necessary skills - good

but I feel like, without a 'winning methodology' none of these 'abilities' will stop me from losing money.

Feelings are not necessarily factual based - need the facts to back up the feelings

You also need to understand why you feel this way



News flash - you will lose money..., I lose money..., all traders lose money

Fact of trading

==============

Another - yet separate - fact;

One can have a methodology that produces way less winners that losers - yet still be profitable overall

=================

Last fact on this (for now)

There are more ways to make money trading than I can count - each of us must find / create our own..., and for it to be successful - it must match our own unique personality

I've been investigating a number of approaches on various instruments for the last few months.

Pick an approach that interests you - master it

One (of the many) pitfalls in this business - way too many options available and people have a hard time focusing

Oh this didn't work..., so let me try that one..., damn that didn't work - now I'll try the one over there

Same occurs (all too often) with indicators

Lots of chart watching and observing price move intraday.

Learned the language yet - or at least beginning to

Also - picked up on any repeatable behavior that could be exploited (notice I specifically did not say repeatable patterns..., rather repeatable behavior)

There will be much more chart watching - get used to it

So far, nothing has been better than flipping a coin, but I live in hope

Hope is a piss poor technique

Coin flip is a 50 / 50 proposition (assuming everything involved in each flip is the exact same... and equal..., and the coin weighted equally)


Mkt / Trading's #1 rule..., overriding all else - uncertainty reigns supreme


Every trade I place is an even money bet - that is my mindset


None of the above is likely helpful - rather it simply a view into the reality of things..., and my mindset

Am I right in thinking that you just trade off of charts using technicals? trendlines etc

The way over simplistic answer is - yes

The more involved answer

I trade price..., volume..., and time - more specifically I trade behavior

A chart is graphical representation of the T&S (not the dome) - the charts I use are broken into time segments (typically..., but incorrectly..., called Time Frame Charts)

I use multiple of these - one for trading..., couple higher for overall orientation .., one lower for microscopic view

So yes - I trade off charts

------

Trend lines (all be they diagonal or horizontal)

Price behavior creates historical data

I use trend lines to objectively contextualize this historical data

Side note = context is not a forecaster - rather context is used as a means to measure / gauge current behavior..., as a means to orient us..., and as a means to frame up each trade (stop loss / profit target / trade direction)

Anyway

Yes, I use trend lines

The etc - I have no clue on (ambiguity and trading simply and absolutely - do not mix)

I see that you almost exclusively trade Facebook? (FB) Do you feel as though you could be as consistent if you were forced to trade somthing else? Say the NQ or an FX pair for example

I trade FB;

1.) Because I am a stock trader (I am not an options / bond/ futures / forex / commodities - or any other kind of trader)

2.) FB's PA / volume / liquidity - marries up well with my personality - at some point I'm certain this will change - at that time I'll move on to a different stock (I keep a basket of potentials in the waiting for very thing)


I absolutely know that PA is PA..., and behavior is behavior - no matter the instrument

I also absolutely know that there are many instrument / markets I cannot trade - their behavior..., and my personality would be like trying to mix oil and water - it ain't happening


NQ - I could trade - simply because I've been exposed to it enough while working with J..., Slugar..., and JS

FX - no clue if I could

CL - I could trade

ES - no clue

Options - not near smart enough

Bonds - no clue

The list of no clues..., or can'ts is quite lengthy

Fortunately the list of stocks I can..., is also quite lengthy

hth Sir

RN

 

[barcadia]

Thanks, @Redneck

 

[VIXTrader]

"It was over a 30 or so trades losing 20 trades at 2 percent each and winning 10 at 1-2 percent each. Usually my win rate is much higher"


If that's the case, then the flaw in your system is trade size. You have to expect certain periods of underperformance where your losers far out number your winners and it seems you didn't account for that. You probably have had some success previously and that's lulled you into a false sense of confidence.

It's all good when you have 20 winners and 10 losers and both wins and losses are around 2%, but when that ratio flips you have to be able to survive that. Especially because it's possible that downturns where losers out number winners can last quite a long time.

If you still believe in your system and everything that made it work in the past still holds true today, the best solution is to reduce trade size and increase your number of occurrences. In time you'll recover what you've lost and go on to a new high water mark.

 

[Turveyd]

"It was over a 30 or so trades losing 20 trades at 2 percent each and winning 10 at 1-2 percent each. Usually my win rate is much higher"


If that's the case, then the flaw in your system is trade size. You have to expect certain periods of underperformance where your losers far out number your winners and it seems you didn't account for that. You probably have had some success previously and that's lulled you into a false sense of confidence.

It's all good when you have 20 winners and 10 losers and both wins and losses are around 2%, but when that ratio flips you have to be able to survive that. Especially because it's possible that downturns where losers out number winners can last quite a long time.

If you still believe in your system and everything that made it work in the past still holds true today, the best solution is to reduce trade size and increase your number of occurrences. In time you'll recover what you've lost and go on to a new high water mark.

Obviously always better to be trading smaller amounts while losing, but larger while winning but...........

As you don't now when you will get a string of losers or winners and your generally playing for winners, this makes above totally stupid.

And if you reduce size after a few losers, it just takes longer to make it back.

I trade near the limit of my 50:1 margin, which i reduced that way my lot size follows my account size closely.