Letting losses ride and living in denial
- Thread starter a529612
- Start date
Maybe you should get a lesson from Franz.
When Daytrading with index futures (not stocks) Double Down is indeed a strategy to "EXIT" a losing trade. This is maximum discipline required for this strat to work.
You get filled, you see the mkt go against your trade by a couple/few ticks, intuition tells you the trade is a dud. Rather than just throw in the towel you double the trade size (for the only purpose of exiting the trade), more often than not regular mkt noise will get you back to even since you need only travel half way back. You HIT the MKT ORDER button and get out. Small nickle and dime losses will allow you to keep playing.
If you do not take the first chance to get out as fast as possible you might miss the best chance. Do not play Russian roulette with Double Down. Treat the strategy as planned and it will be your friend.............
You get filled, you see the mkt go against your trade by a couple/few ticks, intuition tells you the trade is a dud. Rather than just throw in the towel you double the trade size (for the only purpose of exiting the trade), more often than not regular mkt noise will get you back to even since you need only travel half way back. You HIT the MKT ORDER button and get out. Small nickle and dime losses will allow you to keep playing.
If you do not take the first chance to get out as fast as possible you might miss the best chance. Do not play Russian roulette with Double Down. Treat the strategy as planned and it will be your friend.............
Quote from a529612:
My equity was at 120k in Jan but now down to only ~100k. I don't have problem pulling the trigger on a small loss but how do you pull the trigger on a big $20k unrealized loss? It's easier said than done...
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Oh really, DONT HAVE have a problem with small losses;
say that 20 k was ALL GAP EH???????????????????
May want to take part of it off;
sounds like denial all the way.Market looks heading higher now
Easier to lose 20k than 30k
Quote from a529612:
My equity was at 120k in Jan but now down to only ~100k. I don't have problem pulling the trigger on a small loss but how do you pull the trigger on a big $20k unrealized loss? It's easier said than done...
Figure out what you are really feeling - write it down - and then see what feeling comes up next. Write it down. Keep that up until you get to a feeling that you felt before - in high school or grade school.
Embrace that feeling - not as reality - but as an old feeling you have left over from the past. Give it a name and a shape - figure out where in your body it is. Then extract it and put it on the shelf.
The more you can do this - the more you can separate that feeling - whatever it is - from the trade and act rationally.
Feelings do not have to be actions - but unrecognized feelings will always find their way in action (or inaction which is the same).
Good Luck.
When in doubt, exit half. Don't think, just do.
If still in doubt, exit half again. That way your position size will be relatively small in the end yet if you still want to hope (and pray) that it'll come back you still have some in. If it doesn't, then at least you cut your losses short.
You can always re-enter later.
If still in doubt, exit half again. That way your position size will be relatively small in the end yet if you still want to hope (and pray) that it'll come back you still have some in. If it doesn't, then at least you cut your losses short.
You can always re-enter later.
What is you max adverse excursion threshold? If you are already past it, you will need to find a new one. Is it 5K more? Is it 10k?
You can either pare potential further loss by exiting part of your position, and the rest if it drops to your new threshold, or give the whole position the new exit level target and exit it all at that point.
Basically it sounds like you are already past your tolerance level but now you have to "start-over" with the score as it is.
Something may be basically wrong with your system if you are not in disaster-mode (like an earthquake happened or something like that) with an intolerable drawdown. You might benefit from revisiting your rules afterward.
You can either pare potential further loss by exiting part of your position, and the rest if it drops to your new threshold, or give the whole position the new exit level target and exit it all at that point.
Basically it sounds like you are already past your tolerance level but now you have to "start-over" with the score as it is.
Something may be basically wrong with your system if you are not in disaster-mode (like an earthquake happened or something like that) with an intolerable drawdown. You might benefit from revisiting your rules afterward.
Quote from a529612:
My equity was at 120k in Jan but now down to only ~100k. I don't have problem pulling the trigger on a small loss but how do you pull the trigger on a big $20k unrealized loss? It's easier said than done...
Pretty simple - just exit your position. All it takes is a 2 minute phonecall or a 2 second series of mouse clicks.
If you have a psychological problem with doing this, then you should stop trading immediately before you go bust.