How to Handle Loss

[remogul92]

Overnight,

Be Careful playing around man before you mess a newbie head up and send him/she down a bad path of direction. What is bad about your post is that many Liked it. And the comment you made was stupid. You do not know the OP level of trading education to be offer such stupid advice.

Thanks. I'm a noob. I just figured more experienced traders would have had to deal with loss before and wanted to know what other people did.

 

[remogul92]

You registered in 2013 but only had 3 posts?

Losses are always tough to handle, whether you are in trading, professional sport, sales or a surgeon that lost his patient. It is hard for us beginners and seasoned professionals alike.

Streak of losses? I trade options full time since 2013, had a great run until this year. Self doubt is unavoidable but I learned to let go of losses, keep reminding myself to let probability and statistics (win/loss ratio and expectancy) carry the day so I can live to trade another day.

Trading rules? I practiced fractional Kelly and that reduced the stress level and risk of ruin.

Good luck.

Yeah. Shortly after I registered in 2013 life took me in a TOTALLY different direction than I planned. I'm finally getting back to a point where I can focus on trading.

You registered in 2013 but only had 3 posts?

Losses are always tough to handle, whether you are in trading, professional sport, sales or a surgeon that lost his patient. It is hard for us beginners and seasoned professionals alike.

Streak of losses? I trade options full time since 2013, had a great run until this year. Self doubt is unavoidable but I learned to let go of losses, keep reminding myself to let probability and statistics (win/loss ratio and expectancy) carry the day so I can live to trade another day.

Trading rules? I practiced fractional Kelly and that reduced the stress level and risk of ruin.

Good luck.

Yeah. Shortly after I registered in 2013 life took me in a TOTALLY different direction than I planned. I'm finally getting back to a point where I can focus on trading.

 

[remogul92]

T

Decrease the amount you're risking; keep decreasing until it doesn't bother you any more, and only increase it when you feel a positive itch for doing so. Shift to sim, or stop trading for a while if you need to. Go do something special for yourself that will get you back on track - go to a comedy club, have a great dinner, indulge in wild monkey sex (h/t previous posters), take some recently-legalized mind benders (safe ones, please; you need that gadget between your ears to continue trading)... whatever shifts you out of the mental state you're in and gives you a full reset.

One that's specific to my own head, but may work for you: do something that gives you a feeling of successful completion (high chance of success even if the "return" is low.) Then do it again, until you have a number of wins in a row. This works for both maintenance and resetting. E.g., I climbed the Great Sand Dune here in Colorado yesterday, and I'm still seriously high from doing it... and I'm doing pretty well at dealing with some adverse (not trading related) events in life.

Again, from my personal experience: desensitization works. You gain equanimity and perspective with experience. Just gotta make sure it never mutates into indifference.

Good luck.

Thanks. I appreciate the advice. I need stuff to get me back on track.

 

[BlueWaterSailor]

Thanks. This is exactly what I needed to hear. I knew this forum would be a good place to start picking up good habits. I knew more experienced traders had to deal with how they'd handle losses psychologically and I just wanted to see how others did it. I appreciate it.

Frankly, I'm not all that experienced of a trader yet - been at it well under a year. But I've got enough length and breadth of life experience, both involving losses and in general, that I have a pretty good clue about handling and recovering from adversity. It's a skill - and one of things I like about trading is that it forces you to acquire it if you're going to succeed.

 

[ironchef]

Yeah. Shortly after I registered in 2013 life took me in a TOTALLY different direction than I planned. I'm finally getting back to a point where I can focus on trading.



Yeah. Shortly after I registered in 2013 life took me in a TOTALLY different direction than I planned. I'm finally getting back to a point where I can focus on trading.

Welcome back. Hope we can both learn how to trade from some of the experts here.

Good luck.

 

[Amahrix]

Thank you.

Thought provoking statement. I got to think really hard on this.

N.T., one of my all time favorite authors. I learned convexity and fat tails from reading his books.

Read them twice over.

 

[marcela 2020]

leaving emotions aside, after that, it is time to objectively analyze why we have lost and how we can improve and finally put aside fear to lose

 

[bulls95]

leaving emotions aside, after that, it is time to objectively analyze why we have lost and how we can improve and finally put aside fear to lose

Well said. Reviewing is the best way to handles losses. that helps you learn from mistakes and avoid them too.

 

[murray t turtle]

I'm doing 30 back testing trades to test my strategy. My record started off great. But then went through a losing streak. How do you handle a streak of losses? Do you have any trade rules on how to handle a losing streak?

%%
YES,best way on trading losses is cut back on size; or stop trading=unless you have a real low hit rate.Hate losses, so i tend to call them business expences LOL.
[ALSO note the difference in drawdowns + losses.On right right side of like, a 50or 200dma SPY or QQQ trend= OK. But a co that went bankrupt, like DAL, AMR,LEH, don't trade those from the long side @ all. Even more so when, they keep doing dumb stiff like DAL CeO noting he is buying a billion bucks of carbon credits.......................................................................]