Demoralized. Is 14 losses in a row normal?

aquarian1 - Feb 24, 2018 at 8:45 PM

In response to your question is 14 losers in a row normal? Adam gives a table with 16 in a row at 50%. (no idea how this is computed) -see last inclusion.
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Below in a list of his videos - which I posted earlier in another thread for those who ask where to start.

My thought is to stop trading live for the moment. Here is the reasoning:
1. when people develop a system (or set of systems) they often don't ask why does this work? and therefore they are not alert to why it might stop working.
2. A system can work for a period of time and then stop working, perhaps because conditions have changed or their application or the edge evaporated.
3. A system can also stop working for a while do to the chance of a large number of losers. This is the reason behind position sizing and how you compute your 1R. (explained in one of the videos)
4. If you grind in the memory of too many losers you will associate trading with loss and it can stop you from trading properly.

I hope this helps - but really there is not enough information in your post to give a complete answer. It seems that 14*462=$6468. From 29k that is $22,532. That is you post implies your account is $22,532 BUT the tone implies you have lost most of your money. What is PDT (IB' PDT)

------------------------free videos -----------
Adam Khoo
When he was 14 his dad sent him to a NLP seminar. He started with mobile dance studios made money and (then something else?) then got into trading and lost a lot of money, so he decided to learn trading and how to make it back. He has a series of videos. I think it could be a good place for a new trader

Here it the list:

Trade Like a Casino for Consistent Profi

What it takes to be a Profitable trader Part 1

What it takes to be a Profitable trader Part 2

Identifying Support and Resistance Levels



Technical Indicators for High Probability Trading
4 indicators for trading with trend : Psar, Force index (13), MACD (), Moving Averages
4 Oscillators for countertrend: Sto, Boll, Macd, Williams R%
https://www.youtube.com/watch?v=q-fc_TQSL2g

Trading Breakouts. Catch Stocks Before They Make Their Greatest Gains
https://www.youtube.com/watch?v=JWlW6H1cnlU

Trading with Fibonacci Levels Stock Trading Strategies
https://www.youtube.com/watch?v=mVNOU9O5vkE

Five Power Candlestick Patterns in Stock Trading Strategies
https://www.youtube.com/watch?v=hoGkfzJeR6A

https://www.youtube.com/watch?v=adOETTJoj_k

Habits and Emotions of Winning Trader
https://www.youtube.com/watch?v=siE2Xz8mpt4

How I Achieved Success with NL
https://www.youtube.com/watch?v=pHh_vDtQxVg

Take Charge of Your Mind & your Results
https://www.youtube.com/watch?v=UKs6LvNVsho

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aquarian1 - Mar 21, 2018 at 12:48 PM

streaks
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Palindrome said:
· 2 years of success before you consider full time
· Do not be overly excited about a 1 year positive return
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Erm, it's not the return, it's the Sharpe/Sortino ratio that matters. If you are running 6 Sharpe, six months of positive returns is plenty; if you are running Sharpe of 0.75, 2 years is still not enough.
 
sle said:
Erm, it's not the return, it's the Sharpe/Sortino ratio that matters. If you are running 6 Sharpe, six months of positive returns is plenty; if you are running Sharpe of 0.75, 2 years is still not enough.
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But my Sharpe changes with time, without me changing my method?
 
ironchef said:
But my Sharpe changes with time, without me changing my method?
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Well, that's the nature of the beast. If you really want a scientific answer, you can calculate a confidence interval with regards to any risk metric that you use (Sharpe, Sortino, profit/loss etc). That helps a little. There are still unknowns and strategies are know to fail/decay, but usually you know what's working and what's not over time - and that time is usually a function of your Sharpe and/or number of trades.

PS. This is one of the reasons why I like my strategies to have a good prior hypothesis (e.g. flows, regulations etc) - this way you usually know if there is a good reason for it to stop working or that you are simply going through a rough patch
 
looking at Adam's table you could get 21 losers in a row.
That would be $9,660.
I think your R is too big.
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Your expected return is $52.44/per trade over the long run. This is too low (IMO) for risking $460 for your account size.

"This should leave me with about 6k profit per month on a 29k account"
That would be 114 trades per month or 6 a day (on 19 TDs a month).
 
aquarian1 said:
In response to your question is 14 losers in a row normal? Adam gives a table with 16 in a row at 50%. (no idea how this is computed) -see last inclusion.
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Wait, what? The probability of X-long losing streak depends on your sample size and that's not present anywhere from what I see. The problem is not as easy as it seems

PS. if you assume that you actually living in a Bernoulli distribution world, you can use the de Moivre formula (originally developed for gambling with unfair coin). If you had a statistical sample, you can use bootstrapping (of limited value if your distribution is strongly skewed).
 
sle said:
Wait, what? The probability of X-long losing streak depends on your sample size and that's not present anywhere from what I see. The problem is not as easy as it seems

PS. if you assume that you actually living in a Bernoulli distribution world, you can use the de Moivre formula (originally developed for gambling with unfair coin). If you had a statistical sample, you can use bootstrapping (of limited value if your distribution is strongly skewed).
More...

In the video he speaks of "large enough number of trades" - so you really need to watch the video. You notice another poster used Monte Carlo and 1000 trades and got the same number 21.

My math and interest in this is not great enough to debate the point.
My conclusion is not in what the true odds are of a long losing streak, but rather that the OP's 1R is too big for his account size and his loss percentage (which he puts at 58%).

In watching the video you will notice that Adam runs his tests on his systems for quite a long period of time (e.g. 1.5 years). I doubt our OP has done that or really has enough trades to state with confidence what his losing percentage is .... but to your point his sample size is too small.
 
CrashProof said:
OP needs to open an account with www.tradervue.com and import all his trades so they can get a table like this so he knows exactly where he stands with his current numbers.
View attachment 199111
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Good max losses,. Some of the turtles made millions but huge drawdowns /max losses more than that- so make sure to look @ other stuff [Max loss,amen,listed 4 in a row]:cool::cool::cool::cool::cool:[Edit, delayed note if you dont use 1.5 years; use 10 or 20 years or more -that way you get bull + bear markets]
 
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