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  1. #1
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    What's your strategy for coping with big losses?

    Hello, I am curious about how you guys cope with the stress of a big loss or draw-down....
    Do you have any advise for novices about how to cope in such situations?
    Everyone knows that trading psychology is very important, keeping a cool clear head for decisions, etc... But how can we keep cool in the face of such disasters!

    I wish you the best of luck in your trading...

  2. #2
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    Re: What's your strategy for coping with big losses?

    Quote Originally Posted by mubi99
    Hello, I am curious about how you guys cope with the stress of a big loss or draw-down....
    Do you have any advise for novices about how to cope in such situations?
    Everyone knows that trading psychology is very important, keeping a cool clear head for decisions, etc... But how can we keep cool in the face of such disasters!

    I wish you the best of luck in your trading...
    Mate, the only advice I can give you is to ALWAYS know your Stoploss and set it to ALL your trades immediately.

    Basically this is the level which you feel comfortable to lose some money from your account and still can continue to trade.

    Acting in such a way you will NEVER experience stress with big losses. If your trading strategy is profitable, your wins will add more to your account than all losses.

    So just accept losses happened due to Stoploss. This is not to say you have to put your Stoploss in 5-10 pips from OrderOpen price. Be realistic. If your target is 40-50 pips and you havn't missed nice entry point, just right after you got your trade confirmation, then place your stoploss 2-3 pips behind last fractal, you'll be okay in 90% of the cases.

    Good luck!

  3. #3
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    Re: What's your strategy for coping with big losses?

    thank you indo-investasi... now i become a better trader...
    Last edited by dr0o69; 08-07-2010 at 01:07 AM.

  4. #4
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    Re: What's your strategy for coping with big losses?

    Before you enter the trade we must know how much we want to risk our money.

    Another important thing is, do not trade with your emotional, you must be mechanical (cool bloded) when you execution & stay discipline with your Trading System & Trading Plan.

    One more thing Keep it Low Leverage.


    Sincerly;



  5. #5
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    Re: What's your strategy for coping with big losses?

    Hi,

    First, losses in this game is inevitable, so long as we don't loss our confidence & capital. We must accept it
    mentally.

    Next, big loss are result of unplanned trade or loss of discipline that causes it. Hence, the only way is to
    have a plan & strategy and follow it strictly without any doubts. No second quest.

    Take a break from trading to let you cool down and relax like dr0o69 mentioned.
    Then come back fresh to see what you done wrong and don't let history repeat again.
    Read some psychology from Van Tharp, Mark Douglas & etc.

  6. #6
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    Re: What's your strategy for coping with big losses?

    Losses are part of the game.

    To control losses getting out of hand, I use a simple statement:

    IF the trade goes against me, but the reason for entering the trade in the first place is still valid, I stay in.
    IF the trade goes against me and I see that the initial reason for entering this trade is no longer valid, I get out asap.

    Works for me. It's all about having a plan and know WHY you pick a trade.

  7. #7
    Gold Member Array barbara's Avatar
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    Re: What's your strategy for coping with big losses?

    Quote Originally Posted by dr0o69
    for me i'll do exactly same thing with starting. because in trading imho is not profit but survive first - preserve your capital.

    but...if you suddenly (because of X factor) got huge drawdown, i would suggest take a break from trading. i myself once had 50% drwadown from my options trading experience. it is so stress and had impact on my daily job perfomance.

    take a break at least 2 weeks. do not even touch trading paltform and never ever see chart for that time. if can (and still have money of course... ) go and hv fun. do something crazy! do something you like! until you get better.

    and...before you start to trade again. tell yourself that you have forgive yourself because of past mistake. and let's start a new journey again! (it looks silly but this what i'm doing in the past and still do it now)

    happy pipsy for you!

    I like this.. it's very good advice

    For me I start crying for day or two just joking do what Dr (dr0o69) told you and you be fine and much more wiser for the next time

    Barbara

  8. #8
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    Re: What's your strategy for coping with big losses?

    First thing I would suggest when starting trading is only trade with the money you are afford to lose. Second thing set your stops so that if your SL is hit then you do not feel that now all your money or most of it is gone. Build your MM in that way that there is aslo a recovery plan what you are going to do if your SL is hit. If yu have a plan what to do next then you do not feel so down and you will start to work to climb out from hole.

  9. #9
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    Re: What's your strategy for coping with big losses?

    Turn off the computer, go outside and have a coffee in a coffee shop.

    Kiss your kids, wive, girlfriends, boyfriends.

    Remember, somebody still love you no matter what.

    As for me, I watch bugs bunny cartoons.

  10. #10
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    Re: What's your strategy for coping with big losses?

    Keep your chin up - Know your limitis and keep on goin!

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