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. What exactly was the trade? was that a trade, or account overall?
    tell all the details. :confused:

    18% is not a bad drawdown...that may even be a normal daily deviation for some people.
    If you have 30,50,70,90%+ updays...then that's no biggie.
    Just know your potential risks, and potential rewards. -- and continue to play the game.

    as Gordon Gekko said...everyone has good luck, everyone has bad luck...but you keep on playing. no one likes a crybaby

    --i don't like none of those 4 available options on your questionaire. -- you should add a 5'th option...Continue business as usual.
     
    Last edited: May 10, 2015
    #31     May 10, 2015
  2. achilles28

    achilles28

    What is different? Is the market different? If so, how? Less volatility? More flat? More choppy? What does a 'winning' environment look like? Bigger trends? Bigger moves? Smoother moves?

    I agree. Take a break. Paper trade. Find a better market and work on yourself (let winners run....not cut short).
     
    #32     May 10, 2015
  3. hedron

    hedron

    Why not just do 4 from the beginning?
     
    #33     May 11, 2015
  4. Fundlord

    Fundlord

    Gone from 6 figures back to 5 :mad:

    Its as if once I put my position on the price just goes immediately against me.

    I still have a large enough war chest to make a comeback Livermore style :D
     
    #34     May 11, 2015
    lawrence-lugar likes this.
  5. Fundlord

    Fundlord

    Ya I wish I had Geckos inside tips right now :rolleyes:
     
    #35     May 11, 2015
  6. Fundlord

    Fundlord

    Total drawdown has reached 33%, this thread will mark my demise or comeback.
     
    #36     May 11, 2015
  7. Turveyd

    Turveyd

    Okay are you buying. Pull back which normally reverses? Or vice versa, market flips from pull back and reverse fast or vice versa and drop fast trapping you in.

    It could be as simple as that?
     
    #37     May 11, 2015
  8. Fundlord

    Fundlord

    No exactly, I buy/sell when I feel there is a lot of buying/selling occurring. It could be over an hour, day or week. It worked tremendously the past year but now I get stopped out after the price jerks both ways.
     
    #38     May 11, 2015
  9. garachen

    garachen

    Since you are trading manually - if your trading judgement had not been impaired the best thing to do would be to continue as is.

    There are several issues with reducing size. Sure, it's natural because you start to think in terms of capital preservation. But it also reinforces the feeling of there being a long road ahead to get back to your high water mark. If you aren't careful, that will affect your judgement.

    Your biggest asset manually trading is your intuition. A lot of effort needs to go into protecting that and isolating it from all the emotions that get in the way. Don't dwell on drawdowns, don't dwell on win/ loss rates. Trade value rather than price. As you get better at this your drawdowns will disappear and 2-3 consecutive loosing days should become rare. Maybe 3-4 times a year. This is also the problem I have when using charts - they tend to impair your intuition and make you see patterns that have no meaning.

    Maybe you should find / socialize with manual traders who work for established, profitable companies. It's hard to get a sense of sense of what is possible and what is standard when / if you are trying to do it all solo.
     
    #39     May 11, 2015
    stwh likes this.
  10. Turveyd

    Turveyd

    FEEL!!!

    That is your issue, how you feel has either changed or the way the market is acting has changed, so same feeling different result.

    Your also trading US Open time / News on a Monday, madness is to be expected, it's going to spike both ways, has the time you trade changed ??

    I only trade in slow momentum where it's say creeping up/down, no where near news or a market opening.
     
    #40     May 11, 2015