How to control ourself when we lose money?

rider20 · Jul 24, 2020

SunTrader said:
Or just exit. Works for me.

Yeah sometimes, but running is not the solution always.

murray t turtle · Jul 24, 2020

MrMuppet said:
This is an interesting topic, but there is also a simple solution: Go ahead as long as you have edge.

Money management and risk management are there to minimize risk of ruin while maximising return.

I find that a lot of people are focusing on psychology and MM, before they even have edge which is a complete waste of time. When you don't know why you are getting paid, it doesn't make any sense to get into that rabbit hole.

You don't need to control yourself when you don't have edge. The only thing you are supposed to do is to trade as small as possible until you figured it out so you don't blew up before you find your niche.

%%
Exactly MM.
I enjoyed his easy example also; markets are not a lotto/horse race. :caution:

I seldom go to movies anymore/ so loss on a movie ticket=-no problem/LOL.

SunTrader · Jul 24, 2020

rider20 said:
Yeah sometimes, but running is not the solution always.

For me it is. Always.

Witorishan · Jul 25, 2020

the main thing is not to overreact, because any such loss is a good experience, and with experience everything gets better

Volfixtrader · Jul 29, 2020

Witorishan said:
the main thing is not to overreact, because any such loss is a good experience, and with experience everything gets better

The question how many you may to lose?
In boxing there is situation when somebody after terrible fight or series of terrible fights is not able to continue more. They break. With the traders might be the same situation, after very bad period, when people might lose to many money, they can break and are not able to get back.

StatGuy · Jul 30, 2020

I constantly struggle with this. I normally try to only lose about $200 max, but then revenge trading kicks in and then I am down about $500 and super pissed at myself. I think I just need to stick to my planned options trades and stay away from instruments like NQ. I'm down $5K since March and not happy with myself about it. I am way too impulsive.

wrbtrader · Jul 30, 2020

One of the hardest things to do for manual (point n click) traders is to merge risk management and psychology of trading into a working team.

Most can not do it on their own and they need to trade in person with someone that's neutral and can help determine if its the home environment or something not related to trading that's sabotaging the trading.

Sometimes its not the trade method nor the risk management...its just the trader. A trader that's not suitable for trading. Yet, if that trader is not able to put every thing together to work with their trade methodology...

Its a trader that needs to see a trade psychologist so that person can determine how to put the pieces together so that it works together as a person / trader. In fact, any trader can sit down and add up their total losses or missed trade opportunities to see if it exceeds the cost of getting professional help.

wrbtrader

Erik Hughe · Jul 31, 2020

Witorishan said:
the main thing is not to overreact, because any such loss is a good experience, and with experience everything gets better

Yes you said it right. It is important to analyze your mistakes and then make a good comeback instead of getting disappointed.

Volfixtrader · Jul 31, 2020

StatGuy said:
I constantly struggle with this. I normally try to only lose about $200 max, but then revenge trading kicks in and then I am down about $500 and super pissed at myself. I think I just need to stick to my planned options trades and stay away from instruments like NQ. I'm down $5K since March and not happy with myself about it. I am way too impulsive.

I don't know your approach. But If I were you I would decrease own size of trading. Try to trade micro contract (in case futures trading), or use less size in options. The fear and regrets which you have right now (about big losses) might conduct your opinions. If you decrease your losses till 10-20 USD per trades, you might be not so worry about it and it helps to develop better your trading skills.

Volfixtrader · Jul 31, 2020

wrbtrader said:
One of the hardest things to do for manual (point n click) traders is to merge risk management and psychology of trading into a working team.

Most can not do it on their own and they need to trade in person with someone that's neutral and can help determine if its the home environment or something not related to trading that's sabotaging the trading.

Sometimes its not the trade method nor the risk management...its just the trader. A trader that's not suitable for trading. Yet, if that trader is not able to put every thing together to work with their trade methodology...

Its a trader that needs to see a trade psychologist so that person can determine how to put the pieces together so that it works together as a person / trader. In fact, any trader can sit down and add up their total losses or missed trade opportunities to see if it exceeds the cost of getting professional help.

wrbtrader

Once my I asked my wife to be my risk management, and when she knew how many I lost per day, she didn't talk to me whole week.

But I absolutely agree with it. The great champions always have coaches and big teams which help them to achieve aimes, why we think that is so easy to trade alone?