I'm a new trader (4 months under my belt.) I have fantastic days, where my trade lists are crisp. No loser > 4 cents, a solid set of hits. 1-2 cent losers, nice 10-20 winners. I'll feel like a king. Win:loss size ratios of 7:2 on good days with a 45-55% win rate. I'll let it go for 4-5 days in a row. It feels good, and I'll feel like I'm making progress. Then I'll have days where I'm a complete idiot and my losing days are worse than my winning days. On a macroscopic level, losing days should probably be smaller than my winning days. It makes sense from the perspective of keeping losses small. However, what happens during trading is that if I take a 10 cent loser, I go on tilt. Then the next few trades might send me deeper into the hole. I notice that the time between trades decreases and I go nuts. I doubt I'm the only guy who started out with this problem. It's a psychological problem. I just don't know when to call it a "losing day." It's hard to accept a losing day, but not a losing trade. My question to other traders: When do you acknowledge that the day is a loss? If I'm down a little by 10AM, for example, should I stick it out? How do you cope with it? I'm thinking about trying a few things: - Walk around the building once after a larger than normal loser before I come back and sit down. - Stop trading as soon as I'm at a certain level in the hole - Or, just stop trading after one large loser because I'm so prone to stupidity Recommendations to correct this awful behavior would be helpful. I feel like this is the last major hurdle I need to overcome before I become consistently profitable.
I hate it when you respond. Last time you gave me a wacko response, I had problems having even runs of winning days. I overcame that problem. You !@#$er. I'm going to put a sign on my desk that says, "Cheese wants you to lose more" and solve this problem soon. Post your photo and I'll make it my computer background, just to remind me.
fatrat... I like to complete one Forex trade per day Sun-Thur. If I lose on a trade I will skip the following day, to spread the loss over 2 days. If I'm not feeling well I will not trade at all.
This should apply if you are a day trader. Set a loss limit for the day (the amount should be set at the amount you usually make on an average up day) When you hit that loss limit turn off your computer and get away from trading for the rest of the day. (this way for every 3 up days you have 1 down day that still leaves you net positive for the week.) The philosophy behind this is simple. 1st you limit your losses on any given day. 2nd after losing money you change psychologically often placing desperation trades, trading out of anger, etc. Simply put you are no longer in your" A game". Remember this is a marathon not a sprint. Some times less is more......... Once I implemented this change in my trading style I became a very consistant trader often having down days but very few down months.
I suggest a loss limit of 1/2 of what you average per day. This way, a losing day doesn't cost u 3 average days of profit. If you are net negative, breaking even or up small, then base it on the size of your account. This is where being undercapitalized really hurts.
If I am wrong 3 times during the day, its time to quit. Simple rule: 3 strikes, and out for the day. Trading a choppy, not well-defined session is just going to lead to more whipsaws. Regroup and return another day.