There are 4 possible outcomes on a trade... Small gain Small loss Large gain Large loss The only one you can control is "Large Loss"... prevented by stop discipline. KISS, baby!
About "strings of losses"... Usually caused by trading which is sloppy/whimsical, or "trading around the wrong bias". Trading should mostly be done in the direction of the market's "current bias". That is, if you keep getting stopped out on BTD and support buys, perhaps your bullish bias is wrong as you're trading against the current trend. (Years ago I was talking with a trader buddy and I mentioned I'd once had 9 consecutive losers. He said his worst streak was 14. He also said he didn't like to chase upside breakouts... as he believed they were almost always "false"... and so, faded them. Goes without saying the lost his ass fading upside breakouts in a bull market. So then, he tried options... spreads mostly. That didn't go well either. Then in 2010 he shorted into the false support breakdown... a "bear trap". Last I heard he was still holding those shorts... and living in a cardboard box under the viaduct! JK about that . He actually found a woman with a little money and lives with her now... but she keeps her money separate from his... LOL) Bottom Line.... we need to mostly be trading with the same bias as the market's.
First, you either didn't read the entire post, or you completely missed the point. Second, The accident happened after the market closed yesterday.
trading isn’t some kind of spiritual endeavor. second, if you aren’t questioning yourself then you aren’t thinking hard enough about your system and process. The world is always evolving and revolutionizing. You should always question if your edge is waning.
With a win rate of 50% over a span of 1,000 trades - there is likely to be one string of 13 consecutive losers. Variance happens. I try to keep my mind focused on the long game.
I agree. I've avoided trading whimsically (Unlike many years ago). That's why I'm still in the game and doing well. But I think some (not you) have misconstrued my original intent when I started this thread. It was mainly directed toward anyone who is struggling with taking a loss, or many losses in a row. I'm not that guy anymore. I just deal with it and maintain a very systematic method for getting out of winners. BTW, thank you for your input. I've always enjoyed your posts.
Well if you backtest enough and demo trade enough, you will know whether a string of losses is a part of normal trading performance or is really a waning of your edge. That's what I was trying to say. Never intended to offend anyone and I apologize if I did.
but even then a string of losses could mean your strategy no longer works. For what it’s worth I was a terrible quant trader and a much better discretionary trader.
I just want to say thank you for all of the responses from so many members who I have respected so much (and gathered some nuggets of info) over the years. I didn't expect such a response from the rock stars on this board. I know I mentioned in my original post that the crash was a mile from my house. I live in a small town in Wisconsin of about 8K. Turns out my sister and I know the mother who was driving one of the cars, and whose 20 year old daughter was killed in the crash. I am going to go get a very expensive bottle of scotch, get fucked up and cry my eyes out. I think I'm out of trading for the week. But like the GB Packer hall of famer, A.J. Hawk said, "Give yourself a timeline to grieve. But then get back up and hit those mother fuckers as hard as you can". I'm out for a while guys. This sucks. Thanks again.
*could* mean. That's the keyword here. My point is if you did enough backtesting and demo trading, you would be able to eliminate that "could", imo.