And it the very reason you will continue to lose
We've all had to face it - some get past it..., some don't
RN
Best Way To Deal With A Large Drawdown
- Thread starter Fundlord
- Start date
And it the very reason you will continue to lose
We've all had to face it - some get past it..., some don't
RN
Then why did I read where your losers were equal to / double your winners
And oh by the way - internal issues just don't mysteriously fix themselves
Mask their self - all the time..., resolve - no
Resolving takes work
Nevertheless
You win; you're right..., I'm wrong
One thing for certain though; time..., and the ole PnL will tell - PnL never lies
Successful Journey Sir
RN
The plan was to have winners equal or double my losses but internal conflict caused me to cut winners short so they would always end up a fraction of my losses. But the plan was to have winners 2X my losers.
I will keep updating this thread if anyone wants to see if I make it through the storm.
"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"
This is from earlier in the thread. It seems to me that this is not a sign of bad trading at all. What I recall from my reading is that traders should limit their losses to about 2% per trade. So if you're over trading back then, it wasn't by much.
More recently I see that you're down 40%. This is not a problem unless it's giving you pretty solid evidence that you've lost your edge. When you've lost money, your account is smaller and this means that your bets should also be lower. If you are down 10% you should reduce your size by 10% and when you're down 40% you should reduce your size by 40%. If you do this, and you're unlucky (but still have an edge) you can eventually come back.
I wish I knew how to not be afraid of trading. It seems to me that eventually you become enured to losing and it doesn't bother you so much.
When a trading company hires a fresh graduate to train as a trader, they like to hire athletes. I don't think this has anything to do with physical strength or finger speed, etc. I think it has to do with the attitude towards losing. To succeed as an athlete you have to bring your top game every time you show up at the court. You need to throw away all the psychological garbage associated with what happened yesterday or what happened earlier in the game. You are there to fight and you must fight to the best of your ability. And what you are being honored for is not the results of the contest! The military does not have an award for people who are successful in combat. What it gives are awards for people who fight despite their fear. It is a "medal of honor" not a "medal of glory", and what you should be seeking when you trade is honor not glory. That is enough. Like an athlete, just look at one trade at a time. By the way, the reason I think Ichiro did so well is that he brought exactly this attitude to his batting. Traders must do the same thing. If you bat differently each time you show up at the plate it will be impossible to collect good statistics to show you what works and what does not. The same thing applies to trading.
So keep trading and don't worry so much about losing. What you are doing is learning and learning can be painful.
This is from earlier in the thread. It seems to me that this is not a sign of bad trading at all. What I recall from my reading is that traders should limit their losses to about 2% per trade. So if you're over trading back then, it wasn't by much.
More recently I see that you're down 40%. This is not a problem unless it's giving you pretty solid evidence that you've lost your edge. When you've lost money, your account is smaller and this means that your bets should also be lower. If you are down 10% you should reduce your size by 10% and when you're down 40% you should reduce your size by 40%. If you do this, and you're unlucky (but still have an edge) you can eventually come back.
I wish I knew how to not be afraid of trading. It seems to me that eventually you become enured to losing and it doesn't bother you so much.
When a trading company hires a fresh graduate to train as a trader, they like to hire athletes. I don't think this has anything to do with physical strength or finger speed, etc. I think it has to do with the attitude towards losing. To succeed as an athlete you have to bring your top game every time you show up at the court. You need to throw away all the psychological garbage associated with what happened yesterday or what happened earlier in the game. You are there to fight and you must fight to the best of your ability. And what you are being honored for is not the results of the contest! The military does not have an award for people who are successful in combat. What it gives are awards for people who fight despite their fear. It is a "medal of honor" not a "medal of glory", and what you should be seeking when you trade is honor not glory. That is enough. Like an athlete, just look at one trade at a time. By the way, the reason I think Ichiro did so well is that he brought exactly this attitude to his batting. Traders must do the same thing. If you bat differently each time you show up at the plate it will be impossible to collect good statistics to show you what works and what does not. The same thing applies to trading.
So keep trading and don't worry so much about losing. What you are doing is learning and learning can be painful.
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10% is quite aggressive, especially when [NOT IF] but when trend changes;
less than 10 times + you are out[slippage, commissions].But then, that IS why the old timers say cut back when losing; you can get an education with an increase size when losing .But wisdom says don't try this @ home.
I am an agressive trader by nature, I have recovered from most of my drawdown currently at 22% by betting big with tight stops on high probability trades.
Trade with your natural money management, you don't get any draw down which will be big enough to worry about. Large draw downs are the result of bad money management and when you start managing your trades from very start, you won't be getting in such a position to see and worry about a large draw down.