Bad streaks and how to deal with them

Discussion in 'Psychology' started by Mecro, Mar 24, 2004.

  1. Mecro


    Ok I could use some advice from the experienced traders,

    This month has become a nightmare for me. I'm down quite a bit and mostly due to the last 4 days where I just have been getting jerked around left & right on both longs and shorts. I cannot get the moves I used to catch, I have problems closing out any profitable positions due to slippage and have been taking humongous hits on the bad trades. I'm not even churning, my volume has really shrunk (not even 20k a day for the last 2 weeks).

    I guess I'm not even going to go in to trade for the rest of the week and probably some of next week. I'm just afraid to even take a 100 shares in either direction anymore.

    Should I take a week or two off till this market gets better or should I force myself to adjust? I'm trading NYSE which treated me great before Feb/March and now I'm questioning whether I should ever touch it again.

    Anyway, I would love to hear how some of you veterans dealt with bad trading times like these.
  2. monee


    Either adjust or sit out.

    Don't take the stance "when the mkt gets better".

    Some people are making money in this market and were losing in Feb. and vice-versa.

    What I do is keep my expectations low and this way I don't force trades and my results are better than my low expectations.

    Tends to keep me emotionally stable.

    Good Trading
  3. Threei


    My recipe, worked for me many times after single big loss or losing streak:

    1. Stop Trading For a While

    Losing streak is most likely to impact your mental state too deep. You just are not ready to go in the battle again. Give yourself a break from tension. Wait for disgust by trading to pass and for curiosity and desire to try it again to return.

    2. Trade Careful and Slow

    Suppress natural desire to go for revenge and get it all back as fast as possible. Revenge trading wouldn't do any good to you. Trader can't see things clearly when goes for revenge. He wants opportunity to be there and his expectations are enormously high. Right question "what does market have to offer here" changes to wrong one: "what do I need from market".

    3. Don't Be Aggressive

    Stop looking for a trade! Sounds a bit strange, but the matter is: that desire for revenge is still there, within us, and we have much bigger chance than usually to "see" opportunity where there is none.
    Sit and wait for the right trade to yell at you from the screen, for situation where you just can't ignore it - so strongly it feels like winning trade.

    4. Maintain Safe Risk Trading

    Ignore all the trades that wouldn't allow you to get out with smallest loss possible. You just can't afford any more big losses psychologically, even if you can money wise.

    5. Take Action When It's Demanded

    When you see the right trade don't second guess it. Just take it, like a machine that programmed to react on certain situation. In a way, try to be numb, not feeling anything. Setup - risk evaluation - trade. Trade doesn't work out - get out. Don't second guess, don't re-evaluate. Even if you get your profit by re-evaluating original plan, it will put that gambling feeling in you that will destroy confidence and self-control. What you need at this situation is total self-control because this is the only thing that can keep you from more hard losses.

    6. Take Small Profit, Any Profit

    Take relatively small profits not allowing them to disappear.
    Yes, I know, it sounds not right: we need to fight the temptation to take small profits, and we need to let them run. But this situation is very specific psychologically and your biggest need is to regain the confidence. Many small profits taken work for this just perfect. Scalping is my way to dig myself out of a hole.

    In order to do all this you need to become a machine: cut off all the feelings, forget about counting money, looking at your profits or losses. Just trade in a way that helps you to restore the feeling of being in control. You need to feel that you can take the trade when you see right one, that you can cut the loss as soon as trade shows it, and that you can take the money from the market. In order to achieve this state you have to cut as many external links as possible. What I mean by this: stop discussing your trades with anyone, stop asking questions about what other traders think. Don't tell anyone what you are doing, don't complain and don't explain. When you keep it all within yourself, you regain the power of responsibility.

    Feeling that no one is there for you in uncomfortable but it puts you in charge and it means it gives you self control. Not many do it, but think of it this way: not many are successful. It means in order to be successful you have to do something different from what majority does (not really the most original thought in the world, I know). In this case it means: put yourself in charge. Heavy loss or losing streak that caused this situation had a reason. That reason resided within you, not outside. So, in order to prevent this to happen again you have to fix your inner state of mind. You can listen to advice about how to do it but nobody can DO it for you.
  4. How about giving futures a shot? ym or es might just be the answer....
  5. Mecro


    I'm prop so not that many options. If it was my choice, I would not even be trading any USA equity markets which are some of worst trading vechiles in the world.
    It's taking me over 2 months just to finally get my Nazdaq trading up which I will try once I get back.

    I'm too used to NYSE but at the same time I so sick of the specialist abuse that has skyrocketed in the last 2 months. I lost thousands of dollars due to slippage this month.


    Thanks, that sounds like great advice. I'm definitely taking off until next week or maybe even until earnings season when volume comes back around. Gonna party this weekend just to get my mind away from this shitty market.
    I've been avoiding doing 5-10 cent scalping because that is the style I had to swear off in order to turn profitable in October and make some great money. But the market has changed so maybe I should do a little scalping to get back on track.
    I think it's key that I refresh my head so that I stop letting emotions take control any of my trades.
  6. dbphoenix


    I hesitate to state the obvious, but look at a chart of the averages. Almost perfectly sideways for three days. So what can you expect?

    If your strategy requires volume and movement, wait till the dam breaks. We won't continue this non-movement for long.
  7. wtf is wrong with you?
    stop playing grab ass with james stock and work harder..........
    hard work is the answer, but it seems more like you need a kick in your ass
  8. fan27


    I have found myself in somewhat of a similar situation this month. Started off on a losing streak and had a day where I completely lost control about 2 weeks ago. Went back to my bread and butter strategy and waited a week until I finally got a compelling signal (today). Made back more than half this months losses on that one trade.

    Hang in there Merc. You are not alone.
  9. The ES/YM/NQ is the way to go, and these sideways days are great for divergence pattern trading using a mix of volume, Bollinger bands, macd, and stochastics.

    What is your normal daily profit goals when you trade stocks?
  10. Mecro



    Used to be up 500-1000 by 11:30 almost everyday.

    Now I'll take 300 bucks and run home if I even get that chance.
    #10     Mar 24, 2004