I will take break from trading and try to keep my mind fresh and entertain so that I can recover from my feeling and start with a new day on trading.
It means there is something wrong with your whole strategy and analysis. Change your strategy and start all over again.
exactly. honestly i do the same, i feel no other option is better. once you start to lose a trade, all your mind wanders for is how to reverse this and leads to revenge trading. tried that in the beginning phase, made twice the loss i was making before. so started to just shut the system down and take the day off.
What was your loss? Have you analyzed the options and where was the error?
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thatâs the first step they need to take after a loss
with 60% accuracy / success rate, in theory you can have;
4 losers in a row out of 10 trades
8 losers in a row out of 20 trades
40 losers in a row out of 100 trades
The former is more likely to occur than the latter is.
The outcome of any single trade is random, you should be thinking about probabilities and expectancy over a series of trades.
20 trades is a good enough sample size to give your edge time to play out. If it doesnât after 20 trades, you probably donât have an edge.
Do you really want to trade a strategy that doesnât make money after 20 trades? Maybe thatâs something else to think about.
Obviously, you have to follow your trading plan and execute it consistently regardless of the outcome of the previous trade. Sabotaging yourself or bucking your system is another problem entirely.
With that being said, after 3 losses in a row, it is psychologically more difficult to take the next trade. But, it could be the beginning of a string of winning trades that will allow you to recover from the draw down and maybe show a profit.
But you skipped them because you took a break or doubt crept in or you went looking for the next âsystemâ.
Then when you return to trading again, you execute the signals from your âsystemâ while it runs into another string of losses. Or, it just doesnât provide you with an edge.
Its a potential negative, emotional and financial spiral.
You need the right mindset, confidence in your system/strategy and solid risk/money management. It all must work together.
The outcome of this trade is not relevant. Think and approach trading in terms of series of trades, and detach yourself from the outcome.
You will know if its you or your system with this approach.
Easier said than doneâŚ
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^^What the above person just stated is pretty spot on. You have to look at it from a different perspective. If your system technically pulls in 60% of the trades just like the person above me stated their will be times you can run into a string of losses but it shouldâve been accounted for with a decently built system. You canât win every time and to be honest 5 losses in a row is relatively small. Iâve taken a 25 consecutive string loss and bounced back with 60 wins back to back but thatâs because I have faith in my system and understand more importantly losses have to come with the wins. If you canât take the small losses youâll never be able to last for the long run and thatâs the main objective. Making your account last for the long run is what we are trying to achieve. Losses are part of the deal you just have to accept it. I think looking at your system from a mechanical perspective will make it a bit easier though itâs hard due to human emotions. Itâs our psyche that hold us back from being excellent traders to be honest.
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capital preservation was mentioned by the great Uncle Ted lol so yes! itâs all about saving your capital by using proper risk management
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Hi!
Donât be too hard on yourself. Trading is a business of probabilities. So, the unexpected is bound to happen anytime to anyone whether a beginner or expert trader.
However, you probably need to take a break so that you can figure out what is going wrong, and mitigate it.
Below are some of the things you can do to help yourself:
(1) Find out if it is a good strategy used on a wrong price action or vice versa. For example, are you using a trend following strategy in a consolidation.
(2) Also, ask yourself if you learned more things about trading, if that would change your situation: What would you learn to resolve that particular problem?
(3) What if you found a mentor, would it change your situation? Trading needs also guidance from someone who went throught its curves, but is now successful. Joining a traderâs community is a starting point, but there is need to invest in mentors to make things better, easier, and faster. Iâm actually searching for one myself.
(4) What if you stopped trying very hard to avoid losses, and just traded with ease using your intuition to judge movements, would you enjoy your trades and stop losing in a roll?
(5) What if you focused on a demo account for a while until you begin to trade successfully, would it change anything.
(6) Could it be something to do with your start up capital? For example, is the money not much making you worry losing it? Or, is your capital too big but the rate at which you are losing it is worrying you? If you adjusted your capital or learned something relevant to your situation regarding risk management, would that help you relax, and induce wins?
NB: I hope that this helps you analyse your situation. Please ignore suggestions, which are not applicable to your situation.
All the best!
I think, losing 5 trades is quite normal in a beginner-case scenario. So, if you set your risk ratio, then you can probably save something. Loss is a universal truth in trading. So, keep going with the trend and you will have something at the end.
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I have had so many losses that many losses have occurred together. Losses did not damage my account as my risk ratio and money management were correct.
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