Correct! Plan B should always be in place, else traders often think of quitting and not coming back.
How to control ourself when we lose money?
- Thread starter Volfixtrader
- Start date
Emotions is one of the biggest factors investors end up not making as much money as they should have. This is one of the biggest reasons people are now shifting towards algo trading.
You can try your hands on that. Algo Trading gives a more emotion free and disciplined approach to trading. It can greatly reduce any slippage that you incur while doing manual trading. If you want to try your hands in Algo Trading, there are many software that allow you to do it.
You can try your hands on that. Algo Trading gives a more emotion free and disciplined approach to trading. It can greatly reduce any slippage that you incur while doing manual trading. If you want to try your hands in Algo Trading, there are many software that allow you to do it.
do you have any suggestion how to start algo? maybe new thread for it, that would be quite helpful for forum.
You are right. We can't just quit altogether just because we lost money. Hope is what we need to hold on to, obviously along with frequent practice.
Those who begin without any plan or knowledge, usually they are the ones who leave the hope of succeeding very fast. So, to hold on to hope and excel, I would say the right kind of preparation is very important and that is what gives us the confidence to handle losses too.
I agree,its very important to plan well before trading, else survival is tough.
True. Planning is something that gives you some vision and always proves beneficial in the long run. So for best results, we must plan our trades well.
I find in the past on a losing day I will have say 10 trades and most of them are losses whereas on a winning day or night maybe 1 - 3 trades.
So the main thing to do is keep your number of trades around the same and don't move your stops hoping a trade will turn around.
Also, don't keep averaging down into a losing trade. I found I would average down 3 times say for a long and price just kept falling turning a possible small lose into a gigantic loss. The most I will average down once and not move my stop lower anymore. Stop needs to be either reasonable or where the market proves your wrong,
Yes, sometimes you will get stopped out and then market goes a little lower before reversing but you just need to let it go and trade another day or later in the night.
Finally, if you miss a trade say because you open your charts late and price has already moved, just don't trade, and try again later in the day or night or the next day. Don't chase.
Something that helped me recently is another trader mentioned that the market does not care about your 1 contract trade. Don't assume you need to kill the trade early because you worry that price will reverse while you are in a profit and go all the back down to your stop.
Have a plan for the trade including a reason you got in, is it a valid setup, is price action favorable, can you get in at a good price with a reasonable stop. This is why chasing can be bad since your stop would need to be much lower if you are chasing. Don't initiate the trade if you feel you can't take the loss for whatever reason.
Understand your win%. If you have a 70% win percent, then 7 out of 10 trades will be wins and 3 out of 10 trades will be losses.
Realize you can have a draw down, but that does not mean your system is broken, or that you need to change how you trade unless for example, your system only works in bullish markets and does not work in bear markets.
So the main thing to do is keep your number of trades around the same and don't move your stops hoping a trade will turn around.
Also, don't keep averaging down into a losing trade. I found I would average down 3 times say for a long and price just kept falling turning a possible small lose into a gigantic loss. The most I will average down once and not move my stop lower anymore. Stop needs to be either reasonable or where the market proves your wrong,
Yes, sometimes you will get stopped out and then market goes a little lower before reversing but you just need to let it go and trade another day or later in the night.
Finally, if you miss a trade say because you open your charts late and price has already moved, just don't trade, and try again later in the day or night or the next day. Don't chase.
Something that helped me recently is another trader mentioned that the market does not care about your 1 contract trade. Don't assume you need to kill the trade early because you worry that price will reverse while you are in a profit and go all the back down to your stop.
Have a plan for the trade including a reason you got in, is it a valid setup, is price action favorable, can you get in at a good price with a reasonable stop. This is why chasing can be bad since your stop would need to be much lower if you are chasing. Don't initiate the trade if you feel you can't take the loss for whatever reason.
Understand your win%. If you have a 70% win percent, then 7 out of 10 trades will be wins and 3 out of 10 trades will be losses.
Realize you can have a draw down, but that does not mean your system is broken, or that you need to change how you trade unless for example, your system only works in bullish markets and does not work in bear markets.
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