What to do after loss

[ThaddeusFinch]

Being fearful is just as bad as being greedy. Both will destroy your confidence and make you fail as a trader. What you should be focusing on is your risk management and position sizing. If you limit your risk to 2% per trade per studies by academics, your chances of blowing up is nil. So, you can experience 5 or 7 losses all at once and you would be down only 10%-14% and able to get back into the stockmarket. You should think like a casino if you have a trading system that has positive expectation. Over the long haul, you should end up a huge winner. On the other hand, if your trading system has a negative expectation, you are guaranteed to lose all your monies. That is why you need to backtest your trading system, to make sure it has positive expectation.

It is a good suggestion . I want to know is it advisable to just observe market and

Years ago before funding firms came along i played with my own fund. A good whipping from the market usually got me into frenzied mode. I mean playing almost 24 hrs to try to get my money back except for when the market closed for couple hours or i followed my position half asleep until kaboom then i had to work to get a stake for startover. But these passionate moments when my attention was on the outcome of each candlestick was actually good training. You can actually learn a lot from losing if you don't get killed first.

Thank you for your great suggestion and I also want to know is it advisable to just observe the market and get an understanding of the market movement for a while before restarting trading

 

[ThaddeusFinch]

Being fearful is just as bad as being greedy. Both will destroy your confidence and make you fail as a trader. What you should be focusing on is your risk management and position sizing. If you limit your risk to 2% per trade per studies by academics, your chances of blowing up is nil. So, you can experience 5 or 7 losses all at once and you would be down only 10%-14% and able to get back into the stockmarket. You should think like a casino if you have a trading system that has positive expectation. Over the long haul, you should end up a huge winner. On the other hand, if your trading system has a negative expectation, you are guaranteed to lose all your monies. That is why you need to backtest your trading system, to make sure it has positive expectation.

It is a good suggestion . I want to know is it advisable to just observe market and

This begs the question, "why did you not have a loss in your trading plan?"

It is inevitable, but if you did not plan for it, then obviously you did not have a real plan. Probably a plan about making money, full stop.

If you do not know what to do, you need to stop trading and figure out how a loss fits into your overall strategy.

You will have more losses, despite what some fake Youtube guru might say.

I specifically seek for other people's opinions because of this, specifically because of further losses. In my plan, I must determine the cause.

 

[ThaddeusFinch]

dipshit make it back right now! get back in there and get your money back! how you gonna win sitting on the bench?

Yes, and reacting emotionally can lead to even greater losses. It is good to step back and assess my strategy and my trade.

 

[ThaddeusFinch]

I cant speak for other traders but personally I stand down just long enough to figure out why the trade didn't work.Was it a mistake I made or something out of my control. Either way I get right back onto the horse that threw me.

Finding the cause is important, and if it is outside of my control, I need to adjust my approach.

 

[ThaddeusFinch]

Years ago before funding firms came along i played with my own fund. A good whipping from the market usually got me into frenzied mode. I mean playing almost 24 hrs to try to get my money back except for when the market closed for couple hours or i followed my position half asleep until kaboom then i had to work to get a stake for startover. But these passionate moments when my attention was on the outcome of each candlestick was actually good training. You can actually learn a lot from losing if you don't get killed first.

This seems quite risky to me, and it doesn't fit into my risk-management strategy.

 

[ThaddeusFinch]

s Trader, I like your comment.

Definitely every loss is a lesson for improvement.

Yes, every loss offers an opportunity for growth.

 

[Arnie Guitar]

"You've got to lose,
to know
how to win,"

Dream On.
Aerosmith

 

[tomkat22]

and if it is outside of my control, I need to adjust my approach.

Nah wont make any difference. Some trades just aren't gonna work out.

 

[s trader]

It is a good suggestion . I want to know is it advisable to just observe market and

Thank you for your great suggestion and I also want to know is it advisable to just observe the market and get an understanding of the market movement for a while before restarting trading

Sure but observing on a superficial level won't help you much, you have to go deep until you go oh this will help me deal with the likes of my last mistake.

 

[Redneck]

is it advisable to just observe the market and get an understanding of the market movement for a while before restarting trading

Gonna run a little sumthin... sumthin by you - see if it sticks


There are essentially two types of uncertainty associated with trading

First - is embedded organically within the mkt - we never know what price is going to do next - irrefutable fact of our existence / occupation

This is manageable


Demonstrated by your response - I think you have the second.., which is

When we lack

Skills.., and trust in our skills
A definable and repeatable approach - to the mkt / to our trading
A lack of price reading ability
A lack of knowing - losers do happen - our only recourse is to stop out for a loss - 100% of the time
Confidence to know we will do the right thing - every time - no matter what
Ability to get out of our own way

This can be categorized as internal uncertainty - and it the absolute hardest to overcome

Step way the hell back - reassess every damn thing about you / your approach / your mindset/ tear down what needs torn down..., then rebuild it

Next time you think you're ready - likely you won't be - get on sim and trade that for good while - while watching how price moves


ETA - otherwise build a systematic approach that is 100% totally programmable - and let it do the heavy lifting - but know periodically it will need revamped as the mkt changes

Systematic approaches also experience losses


Free advice - take it or not

RN