You need to refine your system where you don't need 100% perfection, because the first time that 100% system lets you down, you won't want to trade anymore. Something like a 50%(or whatever you decide) win/loss would do, where you have confidence of the win/loss ratio. Just as long as the stops are significantly less than expected wins. I now look at a stop loss as the price of entering a trade and the cost of doing business, before I even enter a trade. A stop loss is the cost of the opportunity to make a profit. I am willing to give the stoploss away in exchange for the opportunity to make a profit. Profitseeker had a really good suggestion which helped me when I was learning to do speed key entries. Just do a whole lot of market order flips for a while and write off the commissions as the cost of your education.
I experienced 8 consecutive losses last year that nearly destroyed my confidence. Actually, I lose only about 6% of my capital. But I could not put on more trades. I was 'frozen'. I refined my system and papertrade it. It seems OK now. But I really want to know how could those traders withstand a series of losses.
I don't know how to solve your problem, but I do think you should probably give up trading until it's corrected. If your account is funded with risk capital and you're afraid of losing it, then you're not cut out for this. It's sort of like a poker player lining up his chips so he knows how much he's up or down after each hand. How could he play well if all he did was concentrate on the results after each hand? He couldn't, and noone can trade well if you waste you're time worrying about every blip in your equity. I have a system that only wins 37% of the time and it had 12 losers in a row last year. I traded all the losers and the winner that followed because it was normal for the system. While the distribution of size of moves does not follow a normal distribution, the frequency of wins and losses does. Because of this, it is possible to figure out how many losers in a row you can expect to see. The basic formula for figuring the expected maximum losing streak for a given number of trades is: S = ln(1/T)/ln(L) where: L = % losers S = Streak T = # trades Ex. T = 1000 trades L = .63 or 63% losers S = ln(1/1000)/ln(.63) S = -6.90776/-.46204 S = 14.9507 or a expected max. losing streak of 15 trades I had no trouble taking the first or last losing trade because I knew before I started trading the method, it could happen. If taking 8 losses in a row is a problem, you'd better make sure you have a system with a winning percentage of at least 63%. Even then, you can expect to see streaks of 7 losers in a row.
ADX, do you drive a car? I assume you do,(I hate to assume anything,you know how that goes). But, I've had the same problem the last couple of weeks. I talked to my wife about it tonight and she gave a different perspective on things. You get in your car and drive, and take a risk. You probably don't even think about it because you know how to drive. You get in a dangerous situation, and you react. But, you will still get in your car every day. The markets are no different,except that you can control the risk. Given the two situations I would rather trade than drive. Helped me, hopes it helps you.
IMHO... one major reason a trader does not pull the trigger for entries (and this was true for me in the past) is mostly due to his or her lack of trust in themselves to be able to react distinctly in order to do what is necessary and prudent to manage a trade or position(s) with respect to EXITS! If we think about it... IF all knew what exactly was going to happen like the guy in Dead Zone..... there would be no problem pulling the trigger. But since we cannot know the future absolutely (although we might have excellent intuition and valid judgment or "feel" based upon experience), the only thing we can "know" is the we "trust ourselves" and have trained our minds to follow our instincts and honor a plan; always mindful of the fact that often good plans need to be reviewed, sometimes modified, tweaked and updated.... or maybe even changed or scrapped back to the drawing boards.... in order to continue evolving. Particularly if we wish to provide (us with) the appropriate rewards sought (and deserved) in 'playing' the financial markets well vis-a-vis the risks inherent in this business. All of the success we do or don't realize is (imho) in close accordance with our trust levels in our methods.... and more so in ourselves. The more we begin to trust our instincts and judgments... and implement same (and of course pay dues to develop them in the first place).... the more trading becomes fun, enjoyable and rewarding. It is that simple (and that "complex") in many cases. And this was (and is) part of my evolution.... and many others on this board, I'm sure. Ice
Yes. I am also thinking about this. Driving or flying, you cannot control the risk. So they are even more dangerous than trading. But I don't know why I can get in the car or plane without any problem, even I saw many accidents that killed people. Lossing money is actually better than lossing life!
Who said you "Should" pull the trigger? Maybe this isn't where you are supposed to be in life. This is the only occupation where they have these discussions... can you imagine ..medical school having a course on how to overcom your fear of the sight of blood...