Dealing with losing days and losing trades

Discussion in 'Psychology' started by bellman, Feb 3, 2010.

  1. bellman


    After nearly a year hiatus from trading, I started back live this week. I'm in the midst of developing a proprietary pseudo-automated trading system, but I could use some cash and I wanted to retest some of my trading strategies live. I started out very small scale. Monday and Tuesday I made small proffits, but today after an errant TM trade I was down, and honestly I was a complete wreck. Maybe it's because this is the first time I've been trading and unemployed. To tell you the truth I've been sweating out all of my trades including the winners.

    Anyhow, for the first time in a long time, reading the pages of ET really helped me today. I eventually stumbled on a thread about averaging down on losing trades. After an hour or so I was able to get my head back in the game and finished strong with CSCO for a small proffit during their earnings call.

    Just wish I hadn't gone through all that stress in the first place. There are going to be losing trades and losing days. That's part of the game.
  2. Redneck


    Amazing how much stress a person can place on their self at times – and for no real reason - really

    Trade Well Tomorrow

    Win, Lose, or Draw

  3. Reduce your trading size.

    For me, and i'm sure repeated in many books, if i can't sleep at night the position is probably too large.

    Gotta protect that capital, especially when unemployed.
  4. If you can't afford to lose it, don't gamble it.

    In the same way that a casino has less than a 1% edge, they still don't worry about any one bet because they have table limits. Losing 1 or 10 or 100 in a row won't hurt them.

    If you walked in with a billion dollars in cash and wanted to put it all on lucky 7 on roulette, they wouldn't take the bet because losing would kill them, even though the odds are 37 to 1 against you winning. I hope your edge is better than 37 to 1 against!

    Get a job. Swing trade. Set your stops, high side and low side. Don't worry about it until you get home at night. If you are nervous about a trade, go flat.