How do you handle big draw-downs the next day?

When I suffer the type of DD that you described (DD due to not quiting for the day when you should or allowing a loss to run, basically an episode of poor discipline) I might not trade for up to a week and when I do start to trade I use smallest size possible for a few days.


PS. TradingSolutions is a piece of shit software application so don't waste your money instead buy Neuroshell!

 

It depends if the - 4K day came out of an extraordinary event, like a fat finger or a surprise rate cut...In this case, you can maintain the same size, it just happens from time to time...

If you bleeded all day long and possibly felt that conditions are now different, you'd better pay attention.

For the discretionary Vs systematic battle,
I trade both way and they can be both profitable. You just have to be quite systematic in your discretionary trades and quite discretionary in your bot management...LOL

 

Regardless, it could still impact you emotionally thereby increasing the chance of revenge trading or some such mental affliction.

 

Let’s hypothetically say that the market has shown you a “real direction”, as you call it. The fact is that the market might go in any direction, so your assumption is incorrect. Do it couple of times in a row and say Good Bye to your account, plus you’ll become psychologically screwed (at least temporarily).

Yeah, start very slowly, remove the pressure from trading. Maybe take a week off, and then paper trade.

I think the most important factor is to analyze what went wrong, not just on the surface but, what was the real root of the problem. Once you know why it happened, then implement some kind of safety mechanism into your trading plan in order to prevent it from happening again.

However the problem I see with your thinking is that your goal for the day is NOT TO LOSE. With a focus on not to lose, you’ll fear a loss, and you won’t be objective. Losses are part of trading, and you cannot eliminate them by focusing on NOT losing. Instead I’d recommend you focus on flawless execution according to your trading plan (once you have an updated/revised trading plan)

Pit traders have totally different edges to retail trades and therefore are not useful as an example. Anyway the best traders are discretionary traders, but usually the discretion is subject to well defined objective strategies. Generally system traders are not capable to duplicate the profits and lower drawdowns of discretionary traders, therefore occasionally system traders get a cheap thrill out of putting discretionary traders down.

 

You don't know what you are talking about.

Because you haven't seen one or haven't been able to be one does NOT mean they don't exist.

Think outside the box.

 

OP, this is some good solid advice. Don't underestimate it.

 

i have those from time to time. some is because of the nature of how i trade, some is because i still (even after nearly 10 years) lack complete discipline.

if i lose a large amount of money (relative to what my profits usually are), or am forcing multiple trades / forcing size where it doesn't exist, or doing things which are generally breaking my rules and discipline...

then i take the next day off. no ifs, ands or buts.

i've had times where the one "bad" day leads to a revenge day that's atrocious, and wipes out a lot of hard work. so i try and eliminate that possibility.

but if i have a large loser, and it's because of some rare event? as long as i'm in the right frame of mind, i'll trade the next day.

 

punching bag gaj... works wonders... i use it even tho my dd are small .22% per trade sometimes ill hit 3 in a row and ill be mad emotionally ready to revenge trade... so i go to the bag.. pound away and come back happy

 

This coming from a guy that said to sell on Monday. Great, got to pay attention to you pabst.

 

Yes, young trader, go spend years doing it. Nobody commits time to it, b/c they're looking for easy money.

I do perfectly well, and have beaten buffet since I started.

www.collective2.com/go/pairsqidqld