Best Way To Deal With A Large Drawdown

Discussion in 'Risk Management' started by Fundlord, May 9, 2015.

Best Way To Deal With Drawdowns

  1. Step back from trading, re-evaluate and change strategy

    30.6%
  2. Continue strategy but reduce size

    51.0%
  3. Take a break from trading all together for a while

    12.2%
  4. Try win it all back on one or two well timed trades

    6.1%
  1. Redneck

    Redneck

    We've all suffered this / are suffering it


    Not sure "mechanical" is the best mindset - we're human... not machines

    But a detached / disciplined approach would be imo

    Ultimately your decision of course

    ===============

    Got a plan how to get there..., and prepared to implement that plan

    Because now..., the real work begins

    You're going to need a whatever it takes..., however long it takes - mentality

    And be prepared to take baby steps..., interspersed with many steps backwards - until it resolved

    Truth of the matter..., some never do resolve it - totally your choice to be one of them..., or not



    Successful journey

    RN
     
    #151     May 20, 2015
  2. Buy1Sell2

    Buy1Sell2

    Which means use stops and don't risk more than 2% of TLNW on any one trade/idea.
     
    #152     May 21, 2015
  3. A few hours paper trading doesn't tell you anything. It's one roll of a dice in a series of tens of thousands.
    Trading with much lower leverage for say 6 months seems sensible to me.
     
    #153     May 21, 2015
  4. nursebee

    nursebee

    I hereby nominate this thread for the Hall of Fame.
    This trader is stuck inside that which he/she can't see out of and is incapable of taking advice.
    The gambling parlor loves this sort and will take them back when they get another grubstake.[​IMG]
     
    #154     May 21, 2015
    kut2k2 likes this.
  5. loyek590

    loyek590

    paper isn't where you go to learn if you can guess right. It's where you go to see what happens when you keep guessing like you have been guessing. And that's where drawdown comes in.

    If you just want to learn how to guess open a small betting account

    If you want to learn about drawdown go to paper
     
    #155     May 21, 2015
  6. loyek590

    loyek590

    paper is where you go to learn how increasing or decreasing size affects your account, and how much based on your worse paper drawdown you will need to put this on live. And where you go to experiment with tweaks to the system you are currently running live.

    My strategy keeps me in all the time, I'm very rarely flat, but I always have something going on in my paper account, usually the exact same system I am running live, just to get an extra set of eyes on a problem I may have overlooked.
     
    #156     May 21, 2015
  7. Fundlord

    Fundlord

    UPDATE: DRAWDOWN 41%

    Risked 1% to make 7% one of the better trades of my career.
     
    #157     May 21, 2015
  8. Buy1Sell2

    Buy1Sell2

    Stop orders Stop orders Stop orders!

    Trailing stop orders Trailing stop orders Trailing stop orders!
     
    #158     May 21, 2015
  9. Redneck

    Redneck


    You're dumping gas..., on a raging fire..., that you should otherwise be working your ass off to extinguish

    Mkt is really funny - it'll knock the living shit out of us..., then back off just enough to give us a false sense of - hey I can do this / I got this - iow hope

    Then it'll rip your guts out again

    Unless you step back - and fix you - resign yourself to being a yo yo

    People like me will continue taking your money - and not think twice

    =======================

    FL,

    You've been provided the right direction - the rest is up to you to make it happen

    I don't enjoy..., in the least..., seeing an aspiring trader destroy their self needlessly

    But what the hell - we are after all free to choose our path..., decide our fate

    RN
     
    #159     May 21, 2015
  10. Fundlord

    Fundlord

    The reason I lost 40% was because of short term speculation on 5min and hour charts. Trying to double my account in a month.

    I went back to my old method holding a minimum of 12 hours the risks are super low. The opportunities are few and far between maybe once or twice per week. I have no doubts that I will fully recover using this method.
     
    #160     May 21, 2015