Hot Streak

[wsam29 10]

What are some things you guys do when on a hot streak?

 

Psychologically, its normal to think what ever you touch turns to gold and that may and often does lead to disaster. I heard about it and witnessed it first hand.

 

Having a huge winning day from a trade often does that to one as well.

 

My definition of hot streak are consecutive winning days.

 

My numbers are hardly exciting but 12 trades, 9 winners, 3 losers.

 

There are many more factors and ratios I can post from Tradestation.

 

Each day, only 1 trade was made, win or lose, I called it quits, but traded funds that are under my management.

[brownsfan019 17]

Walter - I strike while the iron is hot. Hence the reason for my posts supporting trading all day, esp on days when you are creating money out of thin air.

[Guest cooter]

Walter - I strike while the iron is hot. Hence the reason for my posts supporting trading all day, esp on days when you are creating money out of thin air.

 

Hi Winfred,

 

Didn't see Walter's response, but to answer your question ...

 

One good day does not necessarily lead to another. In fact, many traders over trade or "supersize" their positions during their next trading session, since they may think that they are "untouchable".

 

Personally, I like to walk away and smile. Take a day off, and enjoy the exhilaration of killing the market. Anything to bring myself back to an even keel after a day (or even a week) off.

[walterw 10]

Walter - I strike while the iron is hot. Hence the reason for my posts supporting trading all day, esp on days when you are creating money out of thin air.

 

The thread is from Winfred, not Walter... lol..

[weiwei 10]

Hot streaks, got too many of them. I am not talking about just a big winnnng day. I have had many 10+ winning days in a row.

 

End up give most of them back. Then have to sit down and re-exam myself on what is causes.

 

Many people will quickly point out why won't you do this and that to provent that. My answers to them is that I guess every one have different way of learning, and that was how I learned.

 

So for now, when it happen again. I take a few day off, extract some profits, try to forget that, and start over again.

 

I hope my experience will help some one to cool off, and not repeat what I did.

[wsam29 10]

Hot streaks, got too many of them. I am not talking about just a big winnnng day. I have had many 10+ winning days in a row.

 

End up give most of them back. Then have to sit down and re-exam myself on what is causes.

 

Many people will quickly point out why won't you do this and that to provent that. My answers to them is that I guess every one have different way of learning, and that was how I learned.

 

So for now, when it happen again. I take a few day off, extract some profits, try to forget that, and start over again.

 

I hope my experience will help some one to cool off, and not repeat what I did.

 

Been there done that!

 

I'm content pocketing 10 ticks and calling it quits. It just takes time to make a killing picking up nickels and dimes along the way.

[torero 10]

I think it was Marty Schwartz who admitted that he doesn't do well after a streak. He does one thing is on Jan 1, he starts at 0. I think this can be done week to week and extract money from the account to keep your feet on the ground. When I started doing this, the giving back become less habitual.

[Guest cooter]

I think it was Marty Schwartz who admitted that he doesn't do well after a streak. He does one thing is on Jan 1, he starts at 0. I think this can be done week to week and extract money from the account to keep your feet on the ground. When I started doing this, the giving back become less habitual.

 

Did you find that you were over trading or oversizing your trades only because your P/L was larger? And was this affecting your trade style (i.e. the psychology of how you take / exit trades)?

[torero 10]

I think I get sloppy with the more wins than expected and started thinking every setup was a sure fire win. I started seeing setups where none existed. Basically I get out of my trading plan. The larger equity keeps telling me "it's ok... you still have so and so to PLAY with." That statements just kills my streak almost immediately and I've caught myself saying that. So when I start clearing out to 0, I have a better objective without the cocky cushion money to play with. Every trade could be my last trade with 0 so I stay attentive and defensive.

[brownsfan019 17]

I think it was Marty Schwartz who admitted that he doesn't do well after a streak. He does one thing is on Jan 1, he starts at 0. I think this can be done week to week and extract money from the account to keep your feet on the ground. When I started doing this, the giving back become less habitual.

 

Extracting money from your account is a great idea in my opinion. First, you see and feel the fruits of your labor. This is useful if you have a significant other, family, friends, etc. that may be doubting your new biz venture and you want to show them cold, hard cash. I know others will say ignore them, but if your wife/husband is questioning what you are doing, putting cash in their face should help for a bit. This also reinforces what you are doing each and every day for your psyche and mental well being. I've read that some traders copy their 'paychecks', print off bank wiring papers, etc. and have them ready when you need a boost.

 

Second, as tor said, you 'restart' your trading account and don't feel as if you are trading with 'house money' which is when many traders easily give money back. It's too easy to just say 'oh, that was just the house money, no biggie'.

 

I would suggest all traders do this, regardless of account size. I know it seems silly to request a check for a 100 bucks, but you NEED to get that check in your hand, esp in the beginning. You NEED to see and feel that by doing your job, you got paid.

 

This is another one of those psyche things that I think are more important than any other part of trading. I believe we are our own worst enemy in trading. Your brain is an incredible, complex thing that can really, really get in your way of being successful at times.

[torero 10]

I agree, sometimes we all need reminders why we spend all this time, energy, and brain power. All work and no reward will make your motivation and drive stale. It also reminds us that make money is the objective, not being right.

[Guest cooter]

Exactly. For all the exhortations here and elsewhere, the only place it counts to be right is when you're on the positive side of the P/L ledger after a day's work in the markets.

[wrbtrader 10]

What are some things you guys do when on a hot streak?...

 

I prefer to sit down and determine the reasons why I don't have a win streak.

 

Hopefully, its because I'm not following my trading plan and that helps enforce that I need to get back to following the trading plan via the view to start making money instead of via the view I want to start a win streak.

 

Also, I get a little more worried when I start looking at it (thinking about it beyond a few seconds) as a win streak when it occurs because that implies to me its a game instead of treating it like a business (a good day at the office).

 

It's this reason why I try to look at my end of day, end of week, end of month or end of year summary results instead of looking at it per individual trade when I'm following the trading plan.

 

Yet, when I'm not following the trading plan, that's when I began looking at individual trades especially at my commentary involving the psychological aspects of the trade that's in my journal for each and every trade I've taken.

 

I guess I'm saying is that when we approach our trading each trading day as if its a business...when we have a hot streak its no big deal but only to those that view it as some game (high five, cheering, patting themeselves on the back et cetera).

 

In fact, its usually another trader that's reviewing my trading results that tells me I'm on a hot streak.

 

I then let the comment go into one ear and out the other ear so I can get back to treating my trading like a business.

 

Mark

(a.k.a. NihabaAshi) Japanese Candlestick term

 

"Volatility analysis is a doorway to consistent profits."[/b]