Losses just aren't that bad. Even long strings of them.

[Scataphagos]

Isn't there some sort of 80/20 rule?
It seem like 80 percent of my profits come from 20% of my trades.
One good trade can make your year, one bad loss takes you out of the game.

There are 4 possible outcomes on a trade...

Small gain
Small loss
Large gain
Large loss

The only one you can control is "Large Loss"... prevented by stop discipline.

KISS, baby!

 

[Scataphagos]

I run a strat which requires very tight risk management, which means my win rate is lower than what some would consider to be "professional" (It's <60%). But it has served me very well because one win can make up for 10 losses, and I can't remember the last time I had 10 losses in a row. But any loss can be very frustrating. Especially when you're new and you're trying to get into your flow. Multiple losses can make you question your abilities, your judgement, and ruin your confidence. More importantly instincts tend to take over after a string of losses and make you want to take profits as soon as you have them. Then you look back and a couple of those trades could have made you profitable for the day/week/month. This still happens to me once in a while, but I push through it and still follow my exit plan for winners.

I live in a small town in western Wisconsin, and when I hear sirens, I sometime get curious and turn on the scanner radio on my phone. Turns out there was a head on collision about a mile from my house with multiple injuries about 20 minutes ago. PD, EMT and fire are on the scene, and a life link helo is on its way from the Twin Cities.

My point? (helicopter just went over) What's the worst that's going to happen during a drawdown? Ok, so you get emotionally distraught. If you're new, it's natural. Just keep putting in the work. If you've been around awhile and you have a system in place which you know to be profitable and you still succumb to these emotions, all I can do is repeat what Lescor said a long time ago (one of the most profitable traders ever on this board). "Think like a pro and act like one".

Again, what's the worst that's going to happen if you're up a little in a trade after a string of losses? You get stopped out again. Big deal. Man up and deal with it. You're not getting a phone call from the police telling you your loved ones are in a helicopter after a serious accident. It's just another loss.

I'm in my 26th year, and I've simply just turned it into a mathematical game, and it's helped me so much.

Good luck to all, and for God's sake, keep it in perspective. It's just a fucking game after all. We're just lucky enough to play it.

About "strings of losses"...

Usually caused by trading which is sloppy/whimsical, or "trading around the wrong bias".

Trading should mostly be done in the direction of the market's "current bias". That is, if you keep getting stopped out on BTD and support buys, perhaps your bullish bias is wrong as you're trading against the current trend.

(Years ago I was talking with a trader buddy and I mentioned I'd once had 9 consecutive losers. He said his worst streak was 14. He also said he didn't like to chase upside breakouts... as he believed they were almost always "false"... and so, faded them. Goes without saying the lost his ass fading upside breakouts in a bull market. So then, he tried options... spreads mostly. That didn't go well either. Then in 2010 he shorted into the false support breakdown... a "bear trap". Last I heard he was still holding those shorts... and living in a cardboard box under the viaduct! JK about that . He actually found a woman with a little money and lives with her now... but she keeps her money separate from his... LOL)

Bottom Line.... we need to mostly be trading with the same bias as the market's.

 

[jnbadger]

First of all, you need to focus more on your trading. Trading is a business regardless whether you trade to manage other people's money or you trade for yourself and it requires 100% of your concentration so you shouldn't be concerned about some freaking sirens going off let alone checking some scanner radios. When you are trading, the whole world should disappear from your senses and you should nothing about everything related to your trading in front of you.

Second, regarding your losses, the only way you will be comfortable with your losses would be if you are absolutely confident, without a shadow of a doubt that the next win will always be able to cover all of your losses, no matter how many and no matter how large. If you are, then you shouldn't be questioning any of your abilities or your judgment. The fact that you still are makes me feel that you are not that confident in your trading strategy and that the mathematical game is not that guaranteed to always net you a winner.

Imo, you should go back to backtest your strategy more and ignore the sirens and the helicopters.

First, you either didn't read the entire post, or you completely missed the point. Second, The accident happened after the market closed yesterday.

 

[newwurldmn]

First of all, you need to focus more on your trading. Trading is a business regardless whether you trade to manage other people's money or you trade for yourself and it requires 100% of your concentration so you shouldn't be concerned about some freaking sirens going off let alone checking some scanner radios. When you are trading, the whole world should disappear from your senses and you should nothing about everything related to your trading in front of you.

Second, regarding your losses, the only way you will be comfortable with your losses would be if you are absolutely confident, without a shadow of a doubt that the next win will always be able to cover all of your losses, no matter how many and no matter how large. If you are, then you shouldn't be questioning any of your abilities or your judgment. The fact that you still are makes me feel that you are not that confident in your trading strategy and that the mathematical game is not that guaranteed to always net you a winner.

Imo, you should go back to backtest your strategy more and ignore the sirens and the helicopters.

trading isn’t some kind of spiritual endeavor.

second, if you aren’t questioning yourself then you aren’t thinking hard enough about your system and process. The world is always evolving and revolutionizing. You should always question if your edge is waning.

 

[comagnum]

With a win rate of 50% over a span of 1,000 trades - there is likely to be one string of 13 consecutive losers. Variance happens.

I try to keep my mind focused on the long game.

 

[jnbadger]

About "strings of losses"...

Usually caused by trading which is sloppy/whimsical, or "trading around the wrong bias".

Trading should mostly be done in the direction of the market's "current bias". That is, if you keep getting stopped out on BTD and support buys, perhaps your bullish bias is wrong as you're trading against the current trend.

(Years ago I was talking with a trader buddy and I mentioned I'd once had 9 consecutive losers. He said his worst streak was 14. He also said he didn't like to chase upside breakouts... as he believed they were almost always "false"... and so, faded them. Goes without saying the lost his ass fading upside breakouts in a bull market. So then, he tried options... spreads mostly. That didn't go well either. Then in 2010 he shorted into the false support breakdown... a "bear trap". Last I heard he was still holding those shorts... and living in a cardboard box under the viaduct! JK about that . He actually found a woman with a little money and lives with her now... but she keeps her money separate from his... LOL)

Bottom Line.... we need to mostly be trading with the same bias as the market's.

I agree. I've avoided trading whimsically (Unlike many years ago). That's why I'm still in the game and doing well.

But I think some (not you) have misconstrued my original intent when I started this thread. It was mainly directed toward anyone who is struggling with taking a loss, or many losses in a row. I'm not that guy anymore. I just deal with it and maintain a very systematic method for getting out of winners.

BTW, thank you for your input. I've always enjoyed your posts.

 

[TheDawn]

First, you either didn't read the entire post, or you completely missed the point. Second, The accident happened after the market closed yesterday.

trading isn’t some kind of spiritual endeavor.

second, if you aren’t questioning yourself then you aren’t thinking hard enough about your system and process. The world is always evolving and revolutionizing. You should always question if your edge is waning.

Well if you backtest enough and demo trade enough, you will know whether a string of losses is a part of normal trading performance or is really a waning of your edge. That's what I was trying to say.

Never intended to offend anyone and I apologize if I did.

 

[newwurldmn]

Well if you backtest enough and demo trade enough, you will know whether a string of losses is a part of normal trading performance or is really a waning of your edge. That's what I was trying to say.

Never intended to offend anyone and I apologize if I did.

but even then a string of losses could mean your strategy no longer works. For what it’s worth I was a terrible quant trader and a much better discretionary trader.

 

[jnbadger]

I just want to say thank you for all of the responses from so many members who I have respected so much (and gathered some nuggets of info) over the years. I didn't expect such a response from the rock stars on this board.

I know I mentioned in my original post that the crash was a mile from my house. I live in a small town in Wisconsin of about 8K. Turns out my sister and I know the mother who was driving one of the cars, and whose 20 year old daughter was killed in the crash.

I am going to go get a very expensive bottle of scotch, get fucked up and cry my eyes out. I think I'm out of trading for the week.

But like the GB Packer hall of famer, A.J. Hawk said, "Give yourself a timeline to grieve. But then get back up and hit those mother fuckers as hard as you can".

I'm out for a while guys. This sucks. Thanks again.

 

[TheDawn]

but even then a string of losses could mean your strategy no longer works. For what it’s worth I was a terrible quant trader and a much better discretionary trader.

*could* mean. That's the keyword here. My point is if you did enough backtesting and demo trading, you would be able to eliminate that "could", imo.