Questions to ask after taking a loss

After taking a loss and journaling it what questions do you often ask yourself to analyze your loss and truly learn from it?

You can’t win every bet !

Some you win - some you lose - Your task is to win more pips than you lose.

If ypu take 100 bets at $1 each and lose $75 an only win $25 - THAT is the time to start asking why - NOT on any single gamble !

Welcome in by the way ! :sunglasses:

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Not all losses are the same for me lol. For me, the greater the loss the bigger the lesson unfortunately :joy:

There is a great stand alone trade journaling software package call EDGEWONK.

It is great and it allows you put in questions that you can ask yourself and then tick off so as to understand what you did right or wrong.

I have been using it for awhile and whilst it cost a bit of money it is a one off cost and a great application.

Check it out on youtube

Cheers

Blackduck

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@destinyp113

I just lost a trade on Facebook - a full 1R loss too, which is actually rare for me

Im also long China index and baidu and that Facebook loss has now got me questioning everything else

I could though ask myself endless questions and beat myself up about it.

It’s just a loss though, and needs to be treated as a business expense.

There is also zero I could have done differently - the execution was fine, but randomness just got me

So now I’m taking my cat to get shampooed and fur trimmed - anything to break the cycle of angst

When I take a loss do I review my trade.

1- Did I broke my rules?
YES => Then no trading for 24hrs
NO=> Then losses happens => move on.

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Just curious which index? China A50 or other? I was buying the dips in HK as well, but took a bit of profit on those now.

@rolandlc33

Yes the China 50 - I don’t get many signals on it but usually when it trends it trend really well.

Much better than say the Dow, Ftse or even nasdaq

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Was is a good trade that lost money, or a bad trade that lost money?

It’s not possible to get right 100% percent. First question you can ask what went wrong. Sometimes it’s wrong analysis, sometimes it’s early entry, sometimes it could be emotional. Find that make a note of it and try not to do that again.

I personally just make sure the trade met my rules, often it has been that it just didnt go my way, win some/lose some. I keep a journal of trades with screenshots so I can look over them when I have enough data, then maybe I can workout that over time a certain pair maybe just doesnt work well with my strategy.

First, you need to have a solid trading rules & strategy.
If you lose a trade, ask yourself:

–> Did I respect my trading rules & strategy?

  • If “No”, then you need to punish yourself with whatever you want.
  • If “Yes”, then:
    1. Review carefully your rules and strategy, maybe there is something wrong and need to be changed and updated… that’s the way you really learn.
    2. If nothing wrong with your rules and strategy, then you need to trust and believe losses happen, it’s not your fault, it’s the market that didn’t agree with you, so it’s okay, and move on.

Rule #1:

  • Always review and update your trading rules and strategy.

I ask myself : Is it an anomaly?

i think a lot have answered your question, my take on it, firstly did you log why you took the trade in the first place, always have a reason to take a trade, signal, trend, information, indicator, whatever influenced you note it down.
It can be simple abbreviations, or a more detailed explanation whatever suits you.
Does the trade fit in your trading plan and did you stick to it, do you need to amend your plan if you are constantly losing trades.
Be subjective rather than critical off your performance, I suspect a lot of traders are guilty of committing to a trade again despite analysing their log and believing they have cracked it, so best not beat yourself up about it.
As i said I believe it’s the decision and why is the crux, not the end result.

First thing to ask after taking a loss is what sort of loss it was.

Type A - Unavoidable loss.
You followed the rules of your strategy. The strategy has a 65% win rate. This loss is therefore one of the 35% of losers. Do nothing except carry on using the strategy.

Type B - Accidental loss.
You accidentally disobeyed a rule of your strategy. This was unintentional, and maybe you bought instead of selling, maybe you set your position size too large, maybe you forgot to set a stop-loss, etc. Urgently reduce your position sizes. You need more practice. Don’t stop demo trading just because you have a live account. Re-read your rules and know them inside out. Get some better sleep. Improve your mental focus.

Type C - Deliberate risk.
You deliberately disobeyed one of the rules of your strategy (or you made a decision which was not covered by the strategy’s rules). Review the rule, force it to justify its place in your strategy. Maybe you were right to disobey the rule even though this time it was a loser. You might need to back-test and game through trade scenarios in more detail to anticipate whatever caused you to skip this rule today.

None of these have much to do with what the market did or why it did it, they are examinations of what the trader did.

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I would add to that, because losses don’t just happen for no reason… If NO, was there any NEW fundamentals that affected the change in price movement? ETC. ETC.

Great call on this one… Took most off now, but overall the trend looks great!