As a live futures trader for more than 2 years I have come to understand my biggest demon, my kryptonite....large down days. Something takes control of my mind and goes crazy. When I'm on a winning streak, I'm taking small chunks out of the market on a regular basis. My profitable day winning streaks often run greater than 10 days and then I wipe it all out with one big down day. I know better, and I know that all I have to do is limit my down day to about 2 winning days and I'll be back to even in a few days or so. I am technically good enough to be consistently profitable but I have to rid this demon to have any chance. Any tips or suggestions on what you do to accept a small loss and shut down for the day?
Make sure your fundamental strategy isn't short convexity. If it is: be aware of it and that the large drawdowns will be a fact of life.
Where your payout profile includes massive blowups with small gains: generally the probability of having the small gains is high; and the massive blowups, low.
Most days my discretionary approach is small gains per contract but I don't have to take big draw down risk to get it. Most days I pull out 1-2 points per contract in the ES. But on that 4th or 7th or 13th day when I'm trading poorly, I'll lose 10 or 20 points and revenge trade. I need to set a firm rule, X points down, no more trades until the next day, I just have a hard time following that rule. I took a break from trading live for about 6 months and traded sim and never had an issue with "taking" a sim loss, for me at least, sim trading may be reflective of the market, but doesn't account for trading demons.
I've thought about these things: 1. Posting my live results every day for accountability. 2. Taping my stop rules to my monitor 3. Getting a kitchen timer and not being allow to get back into the market after a losing trade for X minutes etc.
That's a good idea...Sometimes on my blowups, I widen my stop but what often happens is too many trades trying to pick tops and bottoms and increasing my size on in a "hope" to get back to even. Sounds like an easy fix to my problem is to simply "stop doing that stupid stuff" trust me I know better. I've only had one blowup since returning to live trading again, I'm hoping it's my last.