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Hello Traders,

 

It's been some time since I posted. After years of perseverance, I can finally say I am profitable. I have a trading plan, I use risk management to control my losses and although it is by small amount, I have been making money consistently since last October.

 

As with all trading plans, I was expecting this to eventually happen I'm in a drawdown. My last three out of four trades have been stopped out.

 

I would like to hear your input on how to manage it. Some say, just keep trading the same size and others say decrease lot size, until your trades start to make money again.

 

Your thoughts would be appreciated.

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Hello Traders,

 

It's been some time since I posted. After years of perseverance, I can finally say I am profitable. I have a trading plan, I use risk management to control my losses and although it is by small amount, I have been making money consistently since last October.

 

As with all trading plans, I was expecting this to eventually happen I'm in a drawdown. My last three out of four trades have been stopped out.

 

I would like to hear your input on how to manage it. Some say, just keep trading the same size and others say decrease lot size, until your trades start to make money again.

 

Your thoughts would be appreciated.

 

Hi Bfbusa,

 

It's commonly known these things simply happen from time to time.

 

A diversity of Martingale tests has shown, in situations like you're in right now, it would be best to decrease your lot size until you're back on track again....

 

Cheers!

 

Dutchie

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I guess the question is do you have "max loss limits" in your trading plan for the day, week, and month?

 

I have a weekly max loss limit where I stop trading, for the week and I will reduce my size at two thirds of that number. It allows me to manage the trades with a little less risk on while I get back in the groove.

 

T2C Trading

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To o/p

 

There are two types of markets

a) Trending

b) Ranging

 

another thing to consider is the daily market movement from high to low.

 

so..since I have no clue as to what are the details of your situation I am guessing.

 

From October to December the market was trending down for EUR/USD with a daily trading range of 100 or more pips.

If you were taking 50 pips out of this currency it was feasable.

Today this market is moving much less - what I mean to say that markets do not perform in the same pattern daily.

 

You have to re-examine your trading plan to find out if your trading plan is handling all sorts of market conditions.

 

if you share more details of your methods - people can guide you.

 

so - as I said - I am just guessing...

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To o/p

 

There are two types of markets

a) Trending

b) Ranging

 

another thing to consider is the daily market movement from high to low.

 

so..since I have no clue as to what are the details of your situation I am guessing.

 

From October to December the market was trending down for EUR/USD with a daily trading range of 100 or more pips.

If you were taking 50 pips out of this currency it was feasable.

Today this market is moving much less - what I mean to say that markets do not perform in the same pattern daily.

 

You have to re-examine your trading plan to find out if your trading plan is handling all sorts of market conditions.

 

if you share more details of your methods - people can guide you.

 

so - as I said - I am just guessing...

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Hello Traders,

 

It's been some time since I posted. After years of perseverance, I can finally say I am profitable. I have a trading plan, I use risk management to control my losses and although it is by small amount, I have been making money consistently since last October.

 

As with all trading plans, I was expecting this to eventually happen I'm in a drawdown. My last three out of four trades have been stopped out.

 

I would like to hear your input on how to manage it. Some say, just keep trading the same size and others say decrease lot size, until your trades start to make money again.

 

Your thoughts would be appreciated.

 

I recommend that you let your losses impact your psyche so that you begin to panic and second guess yourself so that we can continue to get some of our money back.

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I tried reducing my position size, switching over to my simulated account and using Options rather than naked positions in currency futures.

 

All three allows me to stay on the top of my game & be current with markets.

Once I start seeing GREEN, I start with smaller positions and add to it as my strategy & trading plan works.

 

Over the years, I learned that DrawDawns take away one's available resources for NEXT BEST poteintially PROFITABLE Trade.

 

Some time it helps to stay out of market and keep the powder dry.

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Hello Traders,

 

It's been some time since I posted. After years of perseverance, I can finally say I am profitable. I have a trading plan, I use risk management to control my losses and although it is by small amount, I have been making money consistently since last October.

 

As with all trading plans, I was expecting this to eventually happen I'm in a drawdown. My last three out of four trades have been stopped out.

 

I would like to hear your input on how to manage it. Some say, just keep trading the same size and others say decrease lot size, until your trades start to make money again.

 

Your thoughts would be appreciated.

 

Trust your testing.

 

If you need the name of a good trading coach to get you through this let me know...PM me.

 

Cheers,

 

 

XS

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OP it’s system dependent. If you ask a question like this without providing context all you’re really going to accomplish is to trigger general / BS answers. Hopefully you won’t latch onto one of them as confirmation of what you have already pre consciously ‘chosen’.

 

By now, you should have a feel through historical testing through various regimes about how robust your system is...

A system’s ‘dependency stats’ is a good starting place for whether or not you should continue trading the same on through a drawdown. From that, the W/L hit rate can also be a factor...

 

Generally speaking, for any system, you need more than one neg run of up to seven consecutive losses to start questioning whether the edge has been ‘taken away’ ...

 

...and a glatial recovery out of drawdown can be more damaging to your progress than the initial experience of the drawdown - and that is an all too common result of playing the 'cut back' game you're considering...:helloooo:

 

Also, fwiw, some systems need to be dynamically sizing all the time... :)

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... If you ask a question like this without providing context all you’re really going to accomplish is to trigger general / BS answers...)

 

There are BS answers and then there are quality BS answers based on content.

 

When you have a drawdown, you begin to panic and second guess yourself even though you are not supposed to do it. You can tell yourself not to do it. You can pay someone else to tell you not to do it, but either way you either learn to fight your way through it or you succumb to mediocrity.

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Sorry about the post. I think its definitely important also to ensure you take in any reply. Whether its bs or not will be up to you to figure out. I feel like for me had I stopped looking at the way others pursued headaches I would might have not been able to achieve consistency. Also like stated before trust your testing, but work through the emotional garbage without damaging your account.

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I have found (free) online coaching articles by Brett Steenbarger have helped me dealing with losses...as follows:

 

He says outsized losses dont just happen, they are actively caused.

 

Its hard to allow losses where four trade parameters are in front of you. ie The Entry / The Target / The Stop / The position size.

 

He recommends:

a/ Get Small

b/ Get Selective

c/ Take responsibility for what CAN be controlled.

 

AND: There is only one cure for TRAUMA (of dealing with loss) and that is repeated experiences of control and safety.

 

He asks the question: Are you trading for "Risk of Ruin" or are you controlling your risk?

 

If the trade is not working, if its not going in the direction you planned, why are you still in it? Very basic, but thats how trading should be, a ROUTINE activity, not emotionally charged and causing you grief.

 

His words ... I am just hoping they help you plot a course of action.

 

All the best....

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I guess the question is do you have "max loss limits" in your trading plan for the day, week, and month?

 

I have a weekly max loss limit where I stop trading, for the week and I will reduce my size at two thirds of that number. It allows me to manage the trades with a little less risk on while I get back in the groove.

 

T2C Trading

 

How do you know when you are back in the grove?

 

it could be that your system works when you stop trading and then stops working when you start again. Perhaps you would have been even or ahead, but your next set of trades sets you back even further.

 

Does it make sense to just suck it up and trade through it?

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Hello Traders,

 

It's been some time since I posted. After years of perseverance, I can finally say I am profitable. I have a trading plan, I use risk management to control my losses and although it is by small amount, I have been making money consistently since last October.

 

As with all trading plans, I was expecting this to eventually happen I'm in a drawdown. My last three out of four trades have been stopped out.

 

I would like to hear your input on how to manage it. Some say, just keep trading the same size and others say decrease lot size, until your trades start to make money again.

 

Your thoughts would be appreciated.

 

I would say that things depend on your system but first of all review your strategy and find what is going wrong and causing your loses.

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To all, I thank you for your input.

 

I deliberately left out the particulars of the trading plan so not to possibly bias the anwsers.

 

I play the opening gaps on the YM

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I would say that things depend on your system but first of all review your strategy and find what is going wrong and causing your loses.

 

I think we all tend to do this - try to work out why a particular strategy is not working.

 

But, if I can just add another 'Brett Steenbarger' piece of advice ... which eliminates all the soul searching / backtesting / beating oneself up....

 

"Asking the question: ' What am I doing wrong ' makes a trader lose sight of his (her) STRENGTHS, and what has bought him success up til now. Sometimes the best of strategies will not work. There is no law that says your particular strategy HAS to work every time.... Markets will do that they want to do.

 

Can you honestly say that you have controlled the four TRADE PARAMETERS that I mentioned in my previous post?

 

If you have, then you would have taken a loss and moved on, instead of the trade still being in play and in drawdown.

 

So trade the setup that works for you - you will know what that is. AND manage your risk. It may not work every time ....but you will have controlled the only things that you CAN control in trading.

 

Slumps only become permanent if you lose sight of the BEST in yourself - there is "nothing wrong".

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Either you will use different strategies according to market situation or you will use a strategy which adapts itself (or you will adapt yourself) to changing market conditions...

if you don't ask and find the answers, you can't fix things or you can't prepare yourself to the future...

That is why majority of beginners lose imvho...

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What is all the fuss about?

 

I'm a little surprised by the OP and the feedback I am seeing.

 

What is the big deal about three losses? Get over it and keep trading. It should only be a problem if you're losses are too large or you are using too much leverage. If that is the case, then there are other problems to be discussed.

 

I have been trading for well over two decades and I can assure you that three losses is nothing. Unfortunately, it is usually the newbie trader that is trying to figure out the problem when three losses occur. It is hard to believe that you have been profitably trading since last October. Are you suggesting that you have not had losing streaks previously since then?

 

Losing trades are NOT mistakes. They happen to the best of traders. Don't try to over-analyze and figure out what went wrong. Trading is a business of probabilities, and we can only put the odds in our favor using our skills and tools, but still, nothing is assured. Not even close!

 

It is not uncommon for me to have five, six, even seven consecutive losses. I friggin' hate the losing streaks, everybody does! But they happen to the best of traders.

 

There was even a month a few years ago where I had 11 consecutive losses (my record), and I wanted to hide under my desk while slicing my wrists. My clients, me, and everyone thought I was the biggest loser of them all. Still my drawdown was only 18.4%. My maximum allowed drawdown is 15% so it was still an UGLY time.

 

My point is, don't fret about your few losses, and especially don't try to tweak your trading system. No way! If you call this a losing streak and its your worse since October, I say you have a hella great trading system and I would love to know about it.

 

Do you care to share?

 

Sorry to be a little abrasive, but take it for a pro trader, your three losses don't mean a thing. Trading is VERY streaky! You will often go through periods of losing streaks. We all do! When you're on a losing streak, reduce your trade size. When you're on a winning streak, increase your size.

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Hello Traders,

 

It's been some time since I posted. After years of perseverance, I can finally say I am profitable. I have a trading plan, I use risk management to control my losses and although it is by small amount, I have been making money consistently since last October.

 

As with all trading plans, I was expecting this to eventually happen I'm in a drawdown. My last three out of four trades have been stopped out.

 

I would like to hear your input on how to manage it. Some say, just keep trading the same size and others say decrease lot size, until your trades start to make money again.

 

Your thoughts would be appreciated.

 

Have you looked at more complex money management approaches such as Optimal F?

 

Bluehorseshoe.

Edited by BlueHorseshoe

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well....I have a suggestion

which can be implemented if you are doing interactive trading....

 

when your position gets opened make sure that your stop loss is 15-20 pips

say you entered in a long trade at 1.3030 with stop loss of 1.3010

the moment the market hits 1.3045 move your stop loss to 1.3030 (which is break even)

 

take profit at your Profit target....

 

so simple....You will only incurr a maximum loss of your stop loss which in my recommendation is 15-20 pips.

 

Of course this method is not good for swing trading...but only for interactive trading...

 

To all readers....Please comment !!!

It is always interesting to have a nice discussion...All of us will learn from this.

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well....I have a suggestion

which can be implemented if you are doing interactive trading....

 

when your position gets opened make sure that your stop loss is 15-20 pips

say you entered in a long trade at 1.3030 with stop loss of 1.3010

the moment the market hits 1.3045 move your stop loss to 1.3030 (which is break even)

 

take profit at your Profit target....

 

so simple....You will only incurr a maximum loss of your stop loss which in my recommendation is 15-20 pips.

 

Of course this method is not good for swing trading...but only for interactive trading...

 

To all readers....Please comment !!!

It is always interesting to have a nice discussion...All of us will learn from this.

 

Agree RForexDad, this is a very simple and controls risk effectively. Coaching others helps us all refocus on our risk management. Its not about winning big, but losing small so we preserve our capital.

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well....I have a suggestion

which can be implemented if you are doing interactive trading....

 

when your position gets opened make sure that your stop loss is 15-20 pips

say you entered in a long trade at 1.3030 with stop loss of 1.3010

the moment the market hits 1.3045 move your stop loss to 1.3030 (which is break even)

 

take profit at your Profit target....

 

so simple....You will only incurr a maximum loss of your stop loss which in my recommendation is 15-20 pips.

 

Of course this method is not good for swing trading...but only for interactive trading...

 

To all readers....Please comment !!!

It is always interesting to have a nice discussion...All of us will learn from this.

 

Well, I use to trade like this with tight stops, but found it unreasonable for long term success. And, it's a very stressful way to trade.

 

My point it, no one can really predict price movement within 20 pips up and down. That is called market noise.

 

I typically trade with an open target letting my indicators determine the exit, but I aim to see 100+ pips on every trade, however, I will get out if markets are relativity quiet or unstable.

 

I move SL to breakeven+1 pip after price has moved to our favor by 50+ pips. This makes the trade risk free trade and I move on. I don't have any other trailing stop strategies, though I wish I had. I'm not interested in doing a 25pip trailing stop or anything like that.

 

With my trading, I believe I am fairly successful. I trade 1:1 leverage and I am up +2037 pips Year-to-date and +23.74%. My goal is 100 pips per week, but I have been exceeding that as of late.

 

For instance, this week, with Forex, I had 13 trades (6 winners/7 losses), broker confirmation statement attached. I netted a total+248pips this week. Wish I can do that every week. In Jan, I hit +721pips, and Feb +946pips (broker confirmation screenshot attached).

 

I prefer to trade off of 4-hr charts as it provides the best lifestyle for an active trader, but I often find myself taking trades off the 30min and 60min chart. I am still trying to ween myself off the faster time frames.

 

Hope this helps.

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February2012b.thumb.jpg.b12fad53fd481931c9adfe856991b028.jpg

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imvho placing stop-loss is not a very good idea for every trade/trader. your timing entering the trade, your strategy, s/r levels, trendlines etc, there are too many factors to consider.

 

I also agree what smmatrix said:

"Trading is a business of probabilities, and we can only put the odds in our favor using our skills and tools, but still, nothing is assured. Not even close!"

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