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. easier said than done :)
     
    #81     May 14, 2015
  2. Redneck

    Redneck

    Hey Barcadia - Thank You for the Very Kind words - but it simply a number - tomorrow it a memory..., and doesn't mean a thing

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

    As for trading;

    Get / stay on the right side of price

    Keep each loser small when you're not

    Each trade - has a reason for entering..., when the trade breaks down and invalidates that reason - get out

    Price movement is a language onto itself - learn it.., as you've learnt your native tongue

    Price movement is not random

    Each of us has had to find/ create our trading approach - so to will you


    Many really good traders on this forum - ask questions - they do respond


    Successful Journey to You

    RN
     
    #82     May 14, 2015
  3. Redneck

    Redneck

    Never confuse trading for easy - some days yes..., but other days will more than make up for them - in spades


    And never take what I post to ever infer trading is otherwise

    I will add this however = Too many make it a lot harder than it needs to be


    RN
     
    Last edited: May 14, 2015
    #83     May 14, 2015
  4. RN, to get rallymode's perspective (and correct me if I'm wrong, @rallymode) you would need to read a post he made about a month ago in another thread regarding retail traders and their "life cycle." the TL;DR version is if you have an edge (in any form, whether "hard" or strategy, etc) that goes through two solid market cycles and survives, then you must master the ability to push it to the hilt. a fantastic post... i'll search for it tomorrow if I remember and post it back here.
     
    #84     May 14, 2015
    Redneck likes this.
  5. Redneck

    Redneck

    LSB

    I am always up for..., and open to learning

    Thank You
    RN
     
    #85     May 14, 2015
    lucysparabola likes this.
  6. I found it. :) Now for sleep...

     
    #86     May 14, 2015
  7. Redneck

    Redneck

    Eloquently written..., and the vast majority I agree with

    I also agree with him on the use of leverage - not ubber excessive leverage - but if available..., and one adept at trading - then it essentially free money available to use - to make money with

    What I do not agree with..., and never will.., no matter who says it..., or how ofetn

    And especially after living through it more than once

    Is excessive draw downs


    They are not necessary..., they are extra work - not only to recover from..., but to get back ahead of..., they are an emotional hell..., they are an anchor around one's neck..., they affect one's trading

    And if not managed absolutely correctly (the drawdown..., and the trader) - will lead to one's complete and utter trading demise (many people have committed suicide over this exact shit)


    I've been doing this far too long for anyone to convince me otherwise


    I'm in this to make money - consistently - period

    And to hell with the wallstreet bullshit / ego fest (8 / 9 figures my ass)

    Hell I could brag if I really wanted to - about the oil trade I have on (talked to H123 about it a while back)

    But why..., and to what end - absolutely none

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

    A trader makes money - that is our job..., that is our only job (protect capital first..., make money second)

    And we can do so with any amount

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

    Likely as not..., Rallymode and I would agree on a lot of trading related topics

    But not this one (necessity of excessive drawdowns) - not now..., not ever

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

    Sleep well LSB - and Thank You for sharing :)

    Tomorrow we'll do'er all again Sir


    RN
     
    Last edited: May 14, 2015
    #87     May 14, 2015
  8. bln

    bln

    Problem: draw down

    Solution: start winning more.. lol, so you get out of draw down.
     
    #88     May 15, 2015
    lucysparabola and lawrence-lugar like this.
  9. Turveyd

    Turveyd

    Draw downs happen, when your edge stops working, losses happen all the time, so it takes a while to realise its not just a bad run, therefore draw downs, unless you have an edge which never quits are always going to be part of trading.


    I liked RNs posts in, post your losing charts, simple setups no issue nothing fancy or special mind, but i don't believe he made 18k , say he took 40pts profit out today, he'd have to be trading at $450 per pt, just not buying it.
     
    #89     May 15, 2015
  10. barcadia

    barcadia

    Hi. Cheers.
    Still working on that.
    From reading a few of your posts, I can see that you are very much into the phsycological aspects of trading, and getting them parts right.
    I kind of feel that I have a good mindset from that point of view in that I can take my losses like a robot, I can be patient and wait for my setups, I don't 'revenge trade', I can let my profits run etc etc, but I feel like, without a 'winning methodolgy' none of these 'abilities' will stop me from losing money.
    I've been investigating a number of approaches on various instruments for the last few months. Lots of chart watching and observing price move intraday.
    So far, nothing has been better than flipping a coin, but I live in hope.
    Am I right in thinking that you just trade off of charts using technicals? trendlines etc?
    I see that you almost exclusively trade Facebook? (FB) Do you feel as though you could be as consistent if you were forced to trade somthing else? Say the NQ or an FX pair for example?
    Regards.
     
    #90     May 15, 2015