Joining the CME gang

[comagnum]

Big hits go with swinging for epic returns, draw-downs of 30-50% are the norm.

You trade a $7k north of $100k in no time and give back 30%, that's still remarkable performance in my book.

 

[NoahA]

i guess i'm fine with the wild swings.

One thing I never saw you mention was the reason behind the huge loss. Was it just a trade that finally hit the stop, where as none of the other trades do? If this is the case, then no problem. A high win rate with an occasional large stop can still be absolutely profitable if the numbers make sense. But if the loss was as a result of you doing something outside of the plan and going on a tilt, then that perhaps would require some attention.

 

[syswizard]

Point is if you're always swinging for the fences the risk of ruin is very high and one day you'll likely to go broke.

Along the lines of risk of ruin: Here is something that might help him set the bet size:
https://www.elitetrader.com/et/threads/kelly-criterion-risk-of-ruin-as-risk-management-tool.310919/

 

[syswizard]

But if the loss was as a result of you doing something outside of the plan and going on a tilt, then that perhaps would require some attention.

That is what I was mentioning....revenge trading can cause that. I guess it's OK to revenge-trade, but you gotta stop when you hit daily max loss limit.

 

[hilmy83]

lost big again. how do you keep your head straight after massive losses?

the bright side is i didn't completely obliterate last months profit..but this is just crushing..

feel like going to the drawing board..or is the betting size the problem.

fuck trading is hard. We'll see how this month's statement looks like. I'm still withdrawing to fund my Coke habit lol

 

[Laissez Faire]

lost big again. how do you keep your head straight after massive losses?

Sorry to hear that.

I think the best is to avoid big losses to begin with. But if the big loss is a fact - I don't think there's any other way than taking a few days off and trading very small initially.

I know at least the way I'm wired I tend to want to make back the loss - which again just enforces really bad behavior and poor trading.

The Losing Streak - Marty Schwartz

Every trader faces it. Only the winners know how to handle it. The dreaded losing streak rears its head every so often and attacks every great trader. It eats away at your judgment; it saps your confidence. Sometimes, it can take you so low that you think you`ll never get out. You`re sure that something has gone wrong, that you`ve lost your touch, that you`ll never be a winner again. When you`re in the middle of it, you think it`s never going to end, but mostly, your judgment and rhythm are off and what you have to do is stop and regain your composure.

The best way to end a losing streak is to cut your losses and divorce your ego from the game. I learned this lesson many years ago at the crap tables in Vegas. The old cliche says "never send good money after bad", and it`s true. You have to manage your resources and not lose too much of your stake. Many people when they`re losing increase their bets; they double up hoping to win it all back on one roll of the dice. That strategy can be devastating. The best way to stop a losing streak is to STOP! STOP THE LOSSES, STOP THE BLEEDING. Take time off and let your intellect take charge of your emotions; the market will be there when you return.

But believe me, this simple advice is much easier to give than to take. In August 1996, I was in the worst losing streak of my career. What was driving me crazy was that I would see the trades, but I was so scared of losing, I wasn`t thinking about winning. This fear of losing was slowing down my reaction time, and while I was seeing everything, I was reacting later and later, which meant that I was taking more risks, not less. What I had to do was to step back and recharge my batteries, but I couldn`t stop. A guy called me and wanted to play some golf. I knew that I needed a break so I told him I`d play eighteen, but as I got up to leave, I couldn`t go out the door without a piece of the action. I couldn`t let the market go up without me. I bought ten lousy contracts and ended up losing twenty-five grand. It ruined my day and further sapped my confidence.

You can never shift from reverse to first gear without first going through neutral. YOU MUST FIRST CHANGE THE DIRECTION OF BAD TRADING BY FIRST SHIFTING TO NEUTRAL. YOU MUST STOP. What happens is that as your fear of losing rises, your emotions start to short-circuit your intellect and you no longer have confidence in what you`re doing. Stopping lets your emotions calm down and lets you reestablish your momentum with your intellect. Remember, time is always your ally. Use it to relax, clear your head, and regain your energies.

Once you`ve stopped, digested your losses, gone through a period of preparation, and feel comfortable with your work habits and methodology, you`re ready to start trading again. The best way to do that is to trade small and to concentrate on being profitable. DON`T START BY TRYING TO MAKE A KILLING.

When I came back, I`d see a trade I liked and I`d do it small with a very tight stop, so if I was wrong, I`d get right out. All the time I kept telling myself, make little profits, make little profits, make little profits. Black ink, black ink, black ink. It`s all psychological. I felt sick and I wanted to make myself feel good again. I wanted to regain my confidence because CONFIDENCE IS ESSENTIAL TO A SUCCESSFUL TRADER. I had three contracts the other day, which is a tiny position for me, but I ended up making $15 000 on them. Fifteen thousand dollars is real money, and I took that and built it into $40,000 the next day, and all of a sudden, I`m hot again, and I feel great.

If for some reason this process doesn`t work initially, try it again by stopping longer and coming back to trading even smaller. The most important thing is to protect your trading capital until you can regain your equilibrium and put all the shadows of the losing streak behind you. Losing streak are an unfortunate part of the game, but if you are a good disciplined trader who can shift into neutral, the losing will end and black inc will start to flow again.

 

[hilmy83]

Sorry to hear that.

I think the best is to avoid big losses to begin with. But if the big loss is a fact - I don't think there's any other way than taking a few days off and trading very small initially.

I know at least the way I'm wired I tend to want to make back the loss - which again just enforces really bad behavior and poor trading.

marty schwartz was the trader i look up to when i read his pit bull book. thanks for that

 

[destriero]

lost big again. how do you keep your head straight after massive losses?

the bright side is i didn't completely obliterate last months profit..but this is just crushing..

feel like going to the drawing board..or is the betting size the problem.

fuck trading is hard. We'll see how this month's statement looks like. I'm still withdrawing to fund my Coke habit lol

Where are you at, Bro? Net liq? Give us some news so we don't have to do a welfare check. You'll get it back.

 

[Laissez Faire]

So, take a break and salvage what you have. The only way you can get back into your groove is with a clean slate and those losses erased from your mind.

You never revealed much about your method, so it's hard to say, but I suspect you made those returns on very high leverage and possibly a bit of luck too. Let's face it - there's an element of luck involved in this game. I'll readily admit it. Both good luck and bad luck (like getting low ticked/stopped out and then have the market go your way just after.

Then, if you continued trading at maximum size you're bound to have a bad day. It happens to us all. But if you're trading with very high leverage it's very easy to become emotional and let a bad day turn into a disaster.

I've had it happened more times than I care to remember.

Bet size is a personal decision, but unless you have a method with an extremely high strike rate and extreme discipline (being able to shut down your system after a loss), you basically have to accept wild equity swings when chasing those huge returns.

Would it be possible to set a daily loss limit on your AMP account? Could that possible help you? Like a 5 % daily loss limit?

 

[syswizard]

Would it be possible to set a daily loss limit on your AMP account? Could that possible help you? Like a 5 % daily loss limit?

He already stated that his daily loss is like 30-60% of accumulated profits. That comes out to $20-$40k....insane IMHO. Should be around $10k or 10% of account balance.