1 bet 1 loss 0 win 2 bet 3 loss 0 win 4 bet 7 loss 0 win 8 bet 15 loss 0 win 16 bet 1 win 16 win consecutive losses... a rarity but why not use it to your advantage... how do you apply consecutive losses in trading.. take a s/r line and 'play' the line.. get long above.. get short below.. but everytime it crosses.. you must wager total cumulative loss plus 1... so when you do finally win you come out ahead.
I see you like Martingale methods to handle consecutive losses. Where Martingale is the position sizing system that includes doubling position sizes after each loss. The idea behind it is no trader can lose a series of consecutive trades as the market will reverse at any time. By doubling the position size, a winning trade can thus recover previous loses and can yield profit. My understanding is to use a Martingale system the trader would need a virtually unlimited supply of money so that he/she can remain alive in market till he/she wins. Also there is chance of margin call if trades are done using borrowed money. Anti-martingale is just opposite to martingale system. Here the trader doubles his position size after every trade he wins. The idea is to maximize the chance of profit in a bullish market. Like martingale IMHO it is also a risky practice as traders can lose more than their accumulated profit amount by losing on only one trade. I see both martingale and anti-martingale as advanced position sizing strategies, which can be used to win trades and/or to maximize profit from trades. But from the average traders prosepective (IMHO) both are high-risk money mangement, that are not at all suited for inexperienced traders and average traders with low risk tolerance, and need very strict money management methods. It would not take much to have this get out of hand for the average trader (IMHO).
Yeah we were having this conversation in chat a couple of Fridays ago, where you take a few losses in a row and alot of guys go down in there leverage and make a profitable trade or two, and then as soon as the leverage goes back up again the losses start. Some days trading is tough and if your stubborn more often than not, it will hurt. The trick is that on some trades there are those nuances that can show up (that only time and experience will show you them - you will never know all the nuances) but those nuances sometimes are enough to put a dampener on the bread and butter routines that we wish we all could follow. These nuances are usually a function of market conditions on that particular day btw, not necessarily your edges. Best thing I can recommend, is that if you are trading a basket of say 9-12 'edges' (i use quotations because some people still believe that they dont exist and its all money management - but heck if it was all money management I shouldnt be sweating my entries at all and I should be sweating my exits way more which with real life money isnt the case for me and most of the guys i talk to), after taking multiple hits - sit around a bit and wait for the higher probability edge stuff to pan out. Ya, you might miss out on the move that you could have caught had you followed your system blindly no matter what, but usually waiting for the tried and tested edge is better. What about when you miss the trade that was a winner after the successive losses and your suppossed 'sure' thing' stuffs up? - it has happenned to every seasoned trader, dont worry, drop your leverage and at least get that batting average up or call it a day/a month/(a year in some cases...). It depends alot as well on your living situation to be able to cope with these scenarios. Its not so simple to say "just follow your system come hell or high water and you'll know if your edges are sound" (thats probably a third of the story), but the main is the conditions and nuances that will pop up and your interpretation of some minor technical point. Very often you go back and re-look at a badtrade to discover that actually your system(for lack of a better word) was right, its that you didnt interpret it correctly. Makes you feel better (but your down in cash), but at least re-examine the stuff ups to fine tune that trading plan. That can take months and months - infact its a good idea to always have your trading plan up on one screen and re-edit some minor technical point that may not show up for another week - but it will be fresh in your memory when it does. Be prepared to completely throw out half a dozen trading plans in your carrer before you find your style . The on the fly rules that you mentioned means that you have not done enough trading - virtually nothing should be left up to "on the fly" trading. Every part of price action and levels that are active at any one time, you need to know where you stand according to your 'worldview' of the mkt. at the point when your decision time has arrived.
NZ â There is a lot of wisdom in your posts. ââ¦.What about when you miss the trade that was a winner after the successive losses and your supposed 'sure' thing' stuffs up? - it has happened to every seasoned traderâ¦.â Missing the big winners from a system is a good motivation to take consecutive losers. ââ¦â¦.It depends a lot as well on your living situation to be able to cope with these scenarios. Itâs not so simple to say "just follow your system come hell or high water and you'll know if your edges are sound" (thatâs probably a third of the story), but the main is the conditions and nuances that will pop up and your interpretation of some minor technical point. Very often you go back and re-look at a bad trade to discover that actually your system (for lack of a better word) was right, itâs that you didnât interpret it correctly.â Setting the limits before live trading is a sound way to know when things are not working.
I can take 10 losing trades in a row yes ten in row without losing my cool and still enjoy going green again. Does it bother me losing ten in arow yes it does but it does not hurt my account since those losing trades are kept small and I plod on with the same system without question
The 3 losses in a row then time out - is what is commonly taught by em Gurus - Its a losing psychology game plan to take time out after 3 losses in a row - what if the 4th one is big winner? You should actually do the opposite - be more agressive when losing by taking every trade
The market doesn't care or know if you had 3 losses in a row. Doubt only creeps in if you do not have a robust system that has been tested long enough with real money. All traders go through this in the early part of the careers and how one deals with it assuming they have a profitable system is usually the difference between success and failure. Losing 3 trades in row is nothing - forget about it