Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
I know from experience how that loss smarts. I recently went through it on a smaller scale dropping my micro account by a third. Didn't matter the size of the account, to the emotions it was a reliving of the pain of a much larger loss in a previously blown account. The way I dealt with it was to drop any contact with sims or live trading for a few days and take time to heal. I had to get away long enough to not be swayed by the negative thoughts. We are all wired different and have different ways of dealing with loss be it it trading or other life events.
I think when this happens time is your friend. It takes time to absorb this experience of the trading journey, in order to regroup and learn from what just happened. In my case I overtraded and sized up with the sting of a few losses. I was watching for the revenge trade, made a couple of good trades and should have stopped there but didn't and slid down the slippery slope finally ending up with the big down day. It all happened quickly with the blinders on the eyes before I could finally shut the computer off.
So the big lesson from this one for me was STOP trading and check rules of entry and management if I loose on 2 consecutive trades in a row. I know this is specific to me in my trading development at this time but it is one of the takeaways that I remember from that experience.
I see it as a brake check to at least slow down the tendency to overtrade.
After I accepted that loss I found I could move on and be open to learning again, taking micro trades not concentrating on the financial reward but on the proper execution of the trade.
First: It's OK, I think many of us did shit like that...
Second: be honest with yourself... It's easy to say "I'll trade small, I'll be patient, I won't over trade etc" then you grow your 10k to 12, say in a week or two; and next thing you know, you doing shit again!!!
there are no clear answers, it's also about how does one trade. do you do mean reversion and add to "loosers" , do it smaller... do you do fixed profits and fixed targets: be more patient , trade less, etc
whatever you do, say to your spouse... if she is supportive all the better, if she is not, beware that it doesn't grudge... don't "blame yourself" but own it, take responsibility!
easy come easy go... look at the good site of it: you still have 10k... I did that shit several times and to complete destruction.
once it takes hold of you, you have to take two steps back before you come back...
stop trading few weeks or so. give your password to your wife, when you in "emotional" danger she don't log you in... lol
I mean there are basically three things you need to do:
Stay away from market till you fully digest it.
Think it over: do you want to keep trading? can you do it? can you manage risk? can you walk away when it's to crazy to bare next time instead of keep throwing darts on the dark (revenge trading)...
if you go back to trading, remember your "insights" and mental boundaries you set upon yourself as a condition to keep trading...
WOW, I know you are hurting and I hope I never have to go there. I would like to make two points. 1. You may have just saved many good people the pain you have experienced with your post. I personally want to thank you for giving me a heads up that may save me a lot of anguish. I mean this and I am hurting with you. I start with 5K over a year ago, added to it when I had the funds, and was doing real good until I got stuck in a contract in March 2020 and lost most of it. Started over in April 2020 and now have made over 90K. Like you I worked very hard to get here. Reading over 30 books, watching multiple videos and hours of research. Now, because of you, and this post, I have a better chance of keeping it. THANK YOU!!!! 2. I have a young friend that has just started investing. He has bragged that he is out preforming the Market by 6%. He is very conservative by our standards but thrilled none the less. You, in 5 months have taken 7K to 10K, for a increase of 42.857%. That's 102.847% per year on average. I guess it can be a matter of perspective. Good Job.
There is not a single profitable trader who has not done what you have done. Trading is a career weighed and measure by how long you can survive doing it. What you are experiencing will happen again. And again. It is human nature to experience loss aversion - but I'd recommend one thing.
Therapy.
If there's a shortcut to profitability, therapy might be it. When you get that fear factor rolling in, it's an entirely physiological response that you can't just 'will' yourself out of. The amygdala sends an alert to the hypothalamus and it shuts off your frontal lobes - the logical and reasoning center - so that you can fight your way out of the crisis or run away from it for your dear life. The trick is become aware of what triggers it for you before you fall victim to the lizard part of your brain.
I'm a trading psych coach and have heard this time and time again. "90% of people fail because they spend 90% of their time on the 10% of trading (mechanics)...and 10% of their time on the 90% of trading (personal psychology). The source of the issue was there before you started trading. Not knowing "thy self" will result in not know when to "not" trade. Trading is a activity you engage in...NOT who you "are". I can only recommend that you seek out a psychology professional, who either knows about trading or also trades themselves and start doing your personal work. -namaskaram
I just wanted to second this book. I've read all the popular psychology books, some many times over, and watched tons of videos from ones like Steenbarger et al, and this book blows them all away. It's not just a book about theory but gives you practical tools to build an system to improve your mental and emotional game.
Knowing why your emotional mind takes over doesn't prevent it from happening - you need to develop the emotional skills to identify the signals before it takes over and renders your logical mind useless, and this book can help you do that.
You need to do the deep work, this isn't a quick fix, but can give you the understanding, the tools and a plan to get there.
When I started trading I had boom and bust results. Turns out when I dug down, my strategy was not as good as I thought it was. If I took a trade and was right, great! If I was wrong I doubled down until I was right. The nice thing about this is it makes money most of the time. The bad part is one day you blow up your account in 15 minutes.
There’s a lot psychologically to unpack here as others have eluded to but one thing I will echo is to set a daily loss limit with your broker. There’s absolutely no reason not to. If the most you’re willing to lose in a day is $1000, set it at $1000. Or if you hate having a daily loss limit, think it’s pointless, and the most your willing to lose is $1000, set it at $2000. At least that way if you hit it, you know you really screwed up. Better than losing 10x that. It’s possible for the best of us to have months of discipline, then one day go on full tilt, chimp mode, etc. One interesting thing I’ve noticed about myself is once I set a daily loss limit, I’ve hit it only a handful of times in years. I think it keeps me honest knowing I need to stick to a plan and use risk management rather than doubling down and sizing up until I’m right and “get back to even”.
Of all the advice... which you already know I think this might be the one you need the most next to a MAX position size relative to your account. That will keep those revenge trades to a minimum.
Because something went wrong here.
10 losses in a row is never out of the realm of possibility. Lets do the math.
Let's say you took a %4 loss on every trade from the equity peak of 70k.
1 70k loss $2800
2 67.2 loss $2688
3 64.5 loss $2580
4 61.9 loss $2477
5 59.5 loss $2378
6 57 loss $2283
7 54.7 loss $2192
8 52.6 loss $2104
9 50.5 loss $2020
10 48.5 loss $1939
Total after ten trades in a row trading at a %4 stoploss on each leaves you before commissions and fees $46,538.
And NO ones going to tell you to daytrade at %4 capitol unless they have an ulterior motive.
MAX should be like one percent. Maybe half a percent or less could be better if your still emotionally trading. (Not everyone CAN trade that small but not everyone SHOULD trade either)
Let's take it a step farther. Let say you bet $2800 EVERYTIME (%4 of equity peak) and took those same 10 losses in a row!
You'd be down to $42,000. %60 from peak equity. Now that is EXTREME but using money management even absolutely terrible money management would have kept you far from losing so much. And man, I'm so sorry. Been there over and over myself!
Money management and NOT trading alone is whats going to keep you in the game. Now I know that sound obvious but it's key.
Now the hard part. Want to know why trading is so hard? It's because it's ASYMMETRIC.
You want to go from 50k to 75k. But once you start it's quite possible you start in a drawdown. So you go from 50k to 25k. The problem is at 50k you only needed ab%50 gain. Once at 25k you need %200 gain!!! Plus commissions and fees.
This all just comes back to the importance of money management. Sometimes the best offence is a good defense.
You clearly are an EXCEPTIONAL trader based on the numbers quoted. I cannot see that being an accident.
Put your trades in a longer percpective, weekly and monthly like stated above then each loss won't melt your brain as it's ONLY ONE trade this week or month.
Keep strict money management rules (less than %1) and you can still trade badly and be OK for those times when you have those exceptional times.
I hope you all the best as that was viscerally upsetting to read! I've been there many... many times but never to that extreme.
