Thanks for the reply. I meant psychologically. A series of losses can really hit your confidence hard!
How to Handle Loss
- Thread starter remogul92
- Start date
You should NEVER have a losing "streak"* of more than a few trades. If you do, it's because either your method is not sound or your bias is wrong... that is, not the same as the market's.
*Years ago I had a streak of 9 losers from BTFD in what I later recognized as a bear market. I was giving the benefit of the doubt to the upside thinking that the dips were small pullbacks in the ongoing bull market. They weren't. My buddy had a devastating streak of 14 losers from shorting upside breakouts in what was a strong bull market. In both cases, our bias was wrong.
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It's simple :
(lol, that sideways shake)
I just turn off my simulation
(kidding again, sorry)
A thought, that i can make a new (better?) plan, makes it all - to go away.
If you're doing swing trading, here's a good start for the list, decent volume and BETA from -0.25 to 0.50 :
https://www.investing.com/stock-screener/?sp=country::5|sector::a|industry::a|equityType::a|exchange::a|eq_beta::-0.25,0.5<turnover_volume;1
Gave the link, because my defeats come from , either , doing some noob testing or going against the market.
(lol, that sideways shake)
I just turn off my simulation
(kidding again, sorry)
A thought, that i can make a new (better?) plan, makes it all - to go away.
If you're doing swing trading, here's a good start for the list, decent volume and BETA from -0.25 to 0.50 :
https://www.investing.com/stock-screener/?sp=country::5|sector::a|industry::a|equityType::a|exchange::a|eq_beta::-0.25,0.5<turnover_volume;1
Gave the link, because my defeats come from , either , doing some noob testing or going against the market.
MattZ
Sponsor
Yes, your mental game will play a big role in trading especially when you are going through tough periods.
As I said, there is no magical way to handle losses, and when it's your first drawdown many do not know whether their method stopped working, the market is choppy/trending and/or other factors that are outside your control.
We wrote a bunch of articles that may help you. Please read them.
https://optimusfutures.com/tradeblo...s-exist-and-how-to-deal-with-them-efficiently
https://optimusfutures.com/tradeblog/archives/a-realistic-insight-into-drawdowns-time-and-length
MattZ
Sponsor
I have seen many drawdowns and I can not say that one is similar to another as they all have different "colors".
While I respect your opinion and experience, one should not try and imitate the drawdown of another trader in terms of % or the number of losing trades.
What does that even mean? Who would try to "imitate someone else's drawdowns?. I mentioned the losses as examples of making bad trades because of one's bias being wrong.
If someone wants to "imitate something in trading", try this. One year I went from Jan 1 to the middle of July without a loser. (A client called me up and asked, "do you realize that we haven't had a loser all year"? Twas the kiss of death, of course.
)
MattZ
Sponsor
What I meant is that the number of losing trades and length of drawdowns would vary from trader to trader.
Great articles. I almost caught myself making one of the mistakes the article told me not to: Changing my plan prematurely. Great advice. Thanks for the read.
Well in the beginning I would drink till I got drunk and or pick up some chick for rough sex,...but got tired of taking a cab next morning to find where I left my car and I was really bruised.
Thereafter I grew up and added more risk control measures and re-access strategy if they were actually going with the flow of price principles, plus I learned how to program, 34 back tests? really that is your sample size? Now I do know I too much at 20,000 plus per signal, but gives me a clear understanding of drawdowns and knowing back testing is limited information as losses will eventually be larger, but software I designed gives me a bell curve like a moving average of sorts that parameters of what I am testing are happening are profitable on each side. If you doing longer timeframes, learn to hedge!!!
Psychologically mean you are not expert status, you have to put in much more work.
Scataphagos posts excellent suggestions.
We all lose, you know when you are getting better when you figured out when not to take some signals cause of price action to the left of now.
MattZ
Sponsor
You are very welcome. Glad it helps you.