What do you do when you take a big hit in the markets?

stockerup · Feb 1, 2003

Quote from qdz2:

Let me tell you my experience. It may be not as constructive as you hope. But it worked for me.

...blame others instead of yourself! Stay away from blaming yourself. For example, see, how the manipulators can do to you. Later, you will understand why you lost in some degree correctly or incorrectly. For example, how small I am comparing to the market.

This statement is a piece of crap. Never blame someone else for your mistakes. Part of becoming a winner is excepting the responsibility of your mistakes and learning from them.

If you keep a journal, analyze it; you might find the problem there. Also, as mentioned, take a few days off and trade with smaller size when you come back. If your still not profitable, paper trade for a while till you are.

plumlazy · Feb 1, 2003

What do you do when you take a big hit in the markets?

I don't take big hits anymore. I stopped hoping and started using stops. I use stops and honor them. Individual trade stops, daily loss stops and weekly loss stops (if need be).

dojibear · Feb 1, 2003

Quote from plumlazy:

What do you do when you take a big hit in the markets?

I don't take big hits anymore. I stopped hoping and started using stops. I use stops and honor them. Individual trade stops, daily loss stops and weekly loss stops (if need be).

ditto for me too... however, from time to time, the 'evil me' sticks his head out of the cage, where I put him in, to whisper in my ear and move my hands : " ...Psst! Doji ! ... Cancel the stp loss, don't get fool by a little a jiggle!... sssss...." And after I take a big loss, I could hear him laughing out loud in his cage !

Cheers!!

trader963 · Feb 1, 2003

I go and workout. If that doesn't seem to relieve the stress.....I kick the dog.

gertsman · Feb 1, 2003

Ah the reason why traders can't make the big bucks. Handling the big losses is a tough thing, but you have to overcome it. Never lose sight of the bigger picture. It is not the daily p&l that matters but the year end. Last January I had my first losing month, who am I kidding I had my head handed to me. It took me 3 month to get my groove back. That butt kicking made a better trader. Once you lose confidence, you are done.

Gertsman

nitro · Feb 1, 2003

Quote from MrDinky:

I know this is going to generate a lot of stupid responses, but I hope it turns into a constructive thread. We all have our up days and down days but how do you cope when you take a crushing hit in the markets?

Personally, I try to do something constructive (i.e. exercise) but find I'm so mentally exhausted I can't even do that. Instead, I'll usually end up doing something with my girlfriend, friends, or maybe I'll even call my mom as corny as that might sound. "Hey mom! Guess how much I lost today?"

Perhaps it was one of those days when you couldn't make a successful trade to save your life. Or maybe it was the day every major bank simultaneously upgraded the company you shorted and held overnight. Whatever the case, the blow to your equity was enough to make you question your system or even your skills as a trader. So what do you do to get your confidence back for the next day?

Get up the next day and get back to work.

nitro

thetraderprofit · Feb 2, 2003

"Ah the reason why traders can't make the big bucks..."

Gertsman,

I have to disagree. As you are well aware, it isn't necessary to take huge risks. It's only important to be consistent. It's a cliche day for me, so I'll say, "There's more than one way to skin a cat,"
but I'm afraid some of the Southeast Asian traders might take me literally.

Although I happen to know your "first losing month" was a doozy,
you did recover nicely (perhaps an understatement).

Let's review unmarried young Gertsman's vehicle purchases in '02:

BMW M3
Cadillac Escalade (because, "it's too cold here in the winter to drive the Beemer").

I've heard you say, and I know you believe, "I LOVE losing money." I just think this strategy is going to eventually end badly, because of the ever increasing position sizes. I hope not, because I really admire your cockiness.

ryanmitcho · Feb 2, 2003

well, i know where you are coming from. i was on my way to having my first 20K month (and i took the first week of Jan off) until friday the 31st i lost 8K. I lost 9K in one position, made 2K trading but after costs i lost 8 K. It was a crushing blow to my pride and my goals- i have never lost even close to that much before and it made me realize that even though i had been doing really well up until that point, the reason i took that huge loss is becuase i didn't honor my stop loss (-1000) and i didn't trade my plan. also, I had a 4000 share position in a stock i never traded before. big mistake, I know i can make it back, but the loss, as badly as it hurt me, was an education to stick to my stops, my plan and my discipline. If you lose a lot of money, you damn well better learn from it and never let it happen again- I know I sure won't lose over 3K in a day again- that is my new limit to quit trading for the day.

SethArb · Feb 2, 2003

I hope it is when my P+L goes slightly neg for the day

that is when I should stop trading or go really small again ...

so hard to do though ...

qdz2 · Feb 2, 2003

This one is a casino manager.

Quote from stockerup:

This statement is a piece of crap. Never blame someone else for your mistakes. Part of becoming a winner is excepting the responsibility of your mistakes and learning from them.

If you keep a journal, analyze it; you might find the problem there. Also, as mentioned, take a few days off and trade with smaller size when you come back. If your still not profitable, paper trade for a while till you are.