I think long-term drawdowns make long-term trading unfit for me because I can’t be gainer with long-term trading. How do you do?
I personally think a trader with long term drawdowns are stupid, a failure If you have such a deep negative in your trading approach, strategy, perspective and results... you need to step back in time and seriously reevaluate everything you're doing That's like saying... I only get raped once every two years I go out... So everything is relatively still fine decent for me, acceptable. Not much to complain about If an employee or boss or business owner had long term drawdowns they'd be out of business
Many ways of long term from simple, larger drawdowns to complex using hedges on entries and hedging open profits when retracement patterns show up, smaller drawdowns. Comes down to ongoing work to get risk management as tight as possible. It is like if you need brain surgery, do you go with surgeon who read about it on some forum or surgeon who assisted for several years before going out on his own. More work you invest your time in backtesting to drawdowns.
Imagine the following scenario: You think you are above average as a stock picker. You believe if you held 10 different positions that over the long haul your 10 positions will make you a lot of money. So you buy and hold, never mind the drawdowns. Dumb thinking imo. Humans are biased and greedy. Frequently we'll buy hot stocks maybe in hot sectors. We may for example load up (like 3 years ago) on Lithium positions as at the time they were flying. The problem is, they all flame out - often for long periods of time. The best way imo, don't believe in anything and run with trailing stops on all your positions if you want to be a long term trader. Mostly nothing runs long term. Having a belief in specific stocks often creates a bagholding mentality where we won't let go.
The problem with trailing stops..are...you get... stopped. Seeing your rather blind generic trading stop get stopped....only to adventure much higher is rather hugely detrimental to your performance A trader needs to possess a greater wider complex view of their trading approach. You can only survive and win in this game if you have much larger wins than your typical loss size. So you truly have to maximize and understand those opportunities moments when present
Drawdowns can recover but also can expand and wipe your account. (Capitan obvious) It depends on your risk profile, you are already saying that you are not comfortable with them, so close your positions and carry on. Drawdowns are for traders that have balls made of steel.
First, just exactly how long is "long term"? Second, just because you're a long term investor doesn't mean you're now entitled to a "long-term drawdowns". You still need to manage your stop and close your position when your stop is hit.
I follow the trend. Buy stocks that are going up. Sell them when the trend changes. Don't hold losers in your portfolio.