Recently I incurred a big loss (10/17/18) because my stop gotten blown away. This has really hindered my mentality as a trader. On friday, I decided to do some paper trading because I wasn't "in the zone". I still incurred losses and a few gains, but my trading mentality of bringing my "A game" isn't there, so how long will it take for my edge and mentality to come back?
This has nothing to do with your so called A game. Fact is, if you do not feel good for whatever reason, do not trade that day! That said, your problem is risk management. You should not be risking more than 2% of your capital on any single trade. So, in 500 trades, one trade is no different than the rest! I am guessing you are trying to swing for the fences and knock a homer in! Don't. Windfall profits come when you least expect it and it falls right into your lap! If you have an edge, Trade number 1 should be no different from Trade number 500! Whether you have a gain or loss is irrelevant to the discussion. Your edge is what determines whether you make monies or not.
If you set a proper position size per risk management, it does not matter. That trade is but, one in hundreds. There are times your trade does not work including, gap ups and gaps down. Sometimes, it would be to your benefit. You miss the point when you are pre-occupied with setting stop losses. It only gives limited protection. In 80% of the time, that limited protection is good enough. Think like a casino! If you have a trading edge, over 500 trades by example, each trade is like any other! A casino just waits till his edge in the game overcomes your greed. Over 1,000, 2,000 spins of the slot machine, you will lose guaranteed! You might luck out hit a $5,000 jackpot but, how much have you lost chasing that jackpot? $20,000 or more? I suggest you use Google and watch the free videos on You Tube on risk management and proper position size information. This is the last thing I have to say on the matter.
Can you provide a example of what happened? The reality is that all traders hit a bad patch. I suggest you do what seems the hardest. Take a week off, ignore the market and have fun. Then come back fresh and start over. Paper trading is a waste of time IMO unless you are a new trader.
A low float stock just had a major news release and I decided to buy into the momentum. I was making a profit for awhile, but a major sell off occurred and I was not able to readjust my stop before it got blown away. I quickly tried exiting the trade to cut my losses, but my hotkeys/shortcuts were not working (I am currently dealing with the issue) and I had to quickly add in a flatten now order button. All in the meantime the sell off was still in effect. I have learned to be prepared for the worst circumstances, so I have adjusted my platform layout since the trade. I plan on taking the next few days off. I come from 6 years on investing experience along with position trading and 2-3 years of trading. I know my strategies are profitable due to backtesting and seeing the real time effects, I could not foresee a technical difficulty or a stop loss getting destroyed. I know the error in my trade was not being prepared for the worst case scenario in terms of technical aspects and risk management.
What will bring your execution back will be *confidence* in your edge. All of this is 'right on' IMO. Rigor, taking responsibility, testing testing testing..... AND a solid stop loss [!!!]. This has been a very narrow market, and for as long as we've had this "FAANG thing going on. WOW! That narrowness means that one slip may put you behind. Great earnings and bad FAANG? Market goes down. Geopolitical resolution and mediocre FAANG? A Meh Market. SHEEESH. Keep sharpening your tools. Stay awake to the possibilities of new ones or old alternates. Work the numbers til you have confidence. Be well.
It's hard to find a strategy that encompass all market environment. Volatile market needs wider stops.
My suggestion when you come back, is to forget about the loss. Of course you can't actually do that. But if the loss lingers in your mind you will try to "win it back". Which likely will only compound things. Each completed trade/each completed day is gone. We can get neither back, just live/trade the next one and the one after and ...