Well-telegraphed darkhorse. You've described exactly what I was going through trading the system in 2004. Every attempt to increase the value of the account was met by a massive dip that took me down to the abyss (2 times in a row). Only on the third attempt was I able to hold my grounds and make new highs. That meant increasing the account by 1566% on the mother of all dips (from a 94% drawdown...a monumental task indeed) just to get back to the breakeven point. How do you think I felt??? LOL, that's were PMA comes in real handy. Now even though I was trading with "play money", the psychological effects were quite profound. Erratic and sleepless nights coupled with great inner doubt overwhelmed my soul for nearly 2 months. Many times I thought to myself to scrap the "losing account" and start a new one, then definitely I will do better, right??(Yeah right; false justification not to mention cheating..Nope, not for me). It was only after I scrutinized my self and my erratic results and looked deeper into my trading model that I worked so hard creating from nothing, did I realize that I was missing two critical components that was holding me back from reaching my goals. The answers to improving my model were right under my nose but I was too "blind" (upset and stressed out) too seeing it. In an instant, my state of mind changed from one of despair and anguish to a sense of inspiration and pride of not giving up on myself. I then managed to go from one point of being the last on collective2's trading list to currently # 3. Wow... what a ride!!!. Now I look back and realize that I was meant to temporarily "fail" in order to succeed. Thus failure (to me at least) somehow brings the very best out me. I don't know why it has to be that way, but it is Best of luck in trading.
I think that failiure forces us to analize ourselves with a microscope, looking for the weakest traits of our personality [or at least those that affect us the most while trading] without failiure it's imposible to evolve as a trader. No wining streak lasts forever, one is bound to take a loser trader, to be proven wrong, everyday several times. What matters is how one approaches the idea of being wrong... it's merely human to make a mistake, but only the wise can grow stronger from their errors.
Was going to start a new thread, but I guess this one is close enough. Here's a quote: "One trader . . . always struck me as a brilliant trader. The ideas he came up with were wonderful; the markets he picked were often the right markets. Intellectually, he knew markets much better than I did, yet I was keeping money, and he was not. [His mistake was in] position size. He traded much too big. For every one contract I traded, he traded ten. He would double his money on two different occasions each year, but still end up flat." This makes perfect sense, but I think the issue goes a bit further than just a matter of reducing one's size, as if per some formula to avoid an unrecoverable drawdown. There needs to be a mental shift in regards to balancing offense vs account preservation that is more than just a matter of math; it goes right to the center of adjusting how we view risk, reward, patience, and perserverence. The question is, would that trader still have made the same "brilliant" trades if his priority had been more defensively oriented?
How agressive (say risking 20%) would be considered not too defensive (say risking 2%)? Any thoughts from anyone?