Best Way To Deal With A Large Drawdown

[Redneck]

my fear of losing is.

We've all suffered this / are suffering it

I really need to be more mechanical in my execution and stop second guessing myself.

Not sure "mechanical" is the best mindset - we're human... not machines

But a detached / disciplined approach would be imo

Ultimately your decision of course

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

Got a plan how to get there..., and prepared to implement that plan

Because now..., the real work begins

You're going to need a whatever it takes..., however long it takes - mentality

And be prepared to take baby steps..., interspersed with many steps backwards - until it resolved

Truth of the matter..., some never do resolve it - totally your choice to be one of them..., or not



Successful journey

RN

 

[Buy1Sell2]

The best way to deal with a large drawdown is to not start a large drawdown in the first place.

Which means use stops and don't risk more than 2% of TLNW on any one trade/idea.

 

[globalarbtrader]

I have been paper trading the past few hours but it confirmed that my actual strategy is not the problem but my fear of losing is.

After trading a few hours I pulled out 30% LOL given I was 10X my normal leverage so it would have been 3% in my real account. But 3% each day risking under 1% over a number of weeks and I have my original capital back in no time.

Spreading risk over a number of trades seems like the game plan, very little leverage to reduce fear clouding my judgement.

Just like I said above I called a large GBP drop and JPY drop but I chickened out and cut the trades. About 350 pips missed due to fear of losing more. 350 pips would mean about 15 -70% to my account.

I really need to be more mechanical in my execution and stop second guessing myself.

A few hours paper trading doesn't tell you anything. It's one roll of a dice in a series of tens of thousands.
Trading with much lower leverage for say 6 months seems sensible to me.

 

[nursebee]

I hereby nominate this thread for the Hall of Fame.
This trader is stuck inside that which he/she can't see out of and is incapable of taking advice.
The gambling parlor loves this sort and will take them back when they get another grubstake.

 

[loyek590]

A few hours paper trading doesn't tell you anything. It's one roll of a dice in a series of tens of thousands.
Trading with much lower leverage for say 6 months seems sensible to me.

paper isn't where you go to learn if you can guess right. It's where you go to see what happens when you keep guessing like you have been guessing. And that's where drawdown comes in.

If you just want to learn how to guess open a small betting account

If you want to learn about drawdown go to paper

 

[loyek590]

paper is where you go to learn how increasing or decreasing size affects your account, and how much based on your worse paper drawdown you will need to put this on live. And where you go to experiment with tweaks to the system you are currently running live.

My strategy keeps me in all the time, I'm very rarely flat, but I always have something going on in my paper account, usually the exact same system I am running live, just to get an extra set of eyes on a problem I may have overlooked.

 

[Fundlord]

UPDATE: DRAWDOWN 41%

Risked 1% to make 7% one of the better trades of my career.

 

[Buy1Sell2]

Stop orders Stop orders Stop orders!

Trailing stop orders Trailing stop orders Trailing stop orders!

 

[Redneck]

UPDATE: DRAWDOWN 41%

Risked 1% to make 7% one of the better trades of my career.

You're dumping gas..., on a raging fire..., that you should otherwise be working your ass off to extinguish

Mkt is really funny - it'll knock the living shit out of us..., then back off just enough to give us a false sense of - hey I can do this / I got this - iow hope

Then it'll rip your guts out again

Unless you step back - and fix you - resign yourself to being a yo yo

People like me will continue taking your money - and not think twice

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

FL,

You've been provided the right direction - the rest is up to you to make it happen

I don't enjoy..., in the least..., seeing an aspiring trader destroy their self needlessly

But what the hell - we are after all free to choose our path..., decide our fate

RN

 

[Fundlord]

You're dumping gas..., on a raging fire..., that you should otherwise be working your ass off to extinguish

Mkt is really funny - it'll knock the living shit out of us..., then back off just enough to give us a false sense of - hey I can do this / I got this - iow hope

Then it'll rip your guts out again

Unless you step back - and fix you - resign yourself to being a yo yo

People like me will continue taking your money - and not think twice

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

FL,

You've been provided the right direction - the rest is up to you to make it happen

I don't enjoy..., in the least..., seeing an aspiring trader destroy their self needlessly

But what the hell - we are after all free to choose our path..., decide our fate

RN

The reason I lost 40% was because of short term speculation on 5min and hour charts. Trying to double my account in a month.

I went back to my old method holding a minimum of 12 hours the risks are super low. The opportunities are few and far between maybe once or twice per week. I have no doubts that I will fully recover using this method.