Can someone share their psychological experience during a winning streak and a losing streak, and what is the best way to learn from trading mistakes ?
Let us get real. Nobody likes to lose any monies. That includes me. So, trading losses sort of deflate you a bit, but, winners make you feel good and elevate your spirits. That is part of the trading experience. That said, the way to minimize the adverse result of losses is to keep losses as small as possible in the first place by using proper risk management. For me, risk management is job number 1. Risk is the only thing you can control in trading in the stockmarket. You have no control over the amount of your gains because you do not know in advance how far a stock will run up to. So, I try to limit myself to 5 trades open at any given time. That, with the 2% risked per trade caps my losses to a maximum of 10% of my capital if all 5 trades end up losers and I lose every cent of those monies. With the use of stop losses, chances are good, I will not even lose that 2% per trade. It may be just 0.5% or slightly, higher. What is my upside? As long as it is multiples of my losses, I stand to make monies. Those larger gains should be more than enough to wipe out those small losses.
During a winning streak: You forget about the wins immediately after you tp and focus on the next trade. Do NOT get mesmerized about the winnings. They are nothing!! During a losing streak: You cry and cry and cry and scream and pound on the desk and smash the mouse (I have lost many mouse to this) and eventually you calm down and focus on the next trade.
Psychologically, consider thinking of it like driving because it takes effort-concentration. You can drive in the snow in the dark, with good tires and wipers for a couple of hours no problem. 14 hours and no breaks is probably going to cause a crash. So just trade within your time frame (time spent or # of trades) of optimal concentration, then take a break. You know you need a break when you start making bad trades. Something to really be aware of is Good-Bad Trades are not the same as Win-Lose Trades. You can make a good trade and lose money (but within tolerances). It was good because it followed the plan. Plan may be bad, but you won't know until you follow it for hundreds of trades. You can make a bad trade and make money. It was bad because you did not follow the plan. For instance, you took too much risk for the reward. So separate the notion of W/L and good/bad trades. Just make good trades and track them as one of the measures of your plan. Once you have a good system and can make good trades, the wins will come. Many traders will confuse making money and their trades being good-bad. Over the long run, this distinction becomes obvious. Hope that helps
In the winning streaks many people tend to risk more. In losing streaks people tend to risk less. That's the man.