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So, I am embarrassed to say I have a problem that I have been unable to fix. I usually trade successfully for many days and then have a bad blow-up day. Unfortunately, the blow-up days will many times wipe out many days of gains. It usually happens when I start the day with a few losing trades and then refuse to lose and keep trying over and over to get it back. This puts me in an aggressive mood, and I start taking trades I usually do not consider and end up digging a bigger and bigger hole for myself.
Lightspeed had a feature where I could set a daily loss limit and if that were hit, I would be blocked from making any further trades for the day. I reached out to Ninja and they said they do not offer anything like that. I was curious if there would be any way to program something that could help me with this.
Can you help answer these questions from other members on NexusFi?
What you're referring to is psychological in nature and it happens to the best of us. In poker it is referred to as 'full tilt' when you start chasing losses. https://en.wikipedia.org/wiki/Tilt_(poker) Unfortunately, I'm not a programmer so I can't help you with that part of your question but for me having a risk and execution plan helps with staying discipline and not going off of emotion. I'm not sure how I would feel having a program blocking me from further trading because a part of trading markets is finding opportunities. Good luck in your trading!
As far as I know, you can use Shark Indicator's BlackBird strategy to configure your max. drawdown percentage / absolute value / max. trades in relation to your account size amongst other useful risk and money management parameters.
Perhaps it could be a good idea to take a deeper look into their software.
"If you don't design your own life plan, chances are you'll fall into someone else's plan. And guess what they have planned for you? Not much." - Jim Rohn
Normally any broker offer the "autoliquidation feature", it's a document that you have to sign and send back to the broker. It lets you specify an autoliquidation criteria such as max daily loss in dollar or percentage amount etc...
The first time you ask they will invent some excuse, you must insist, they have this feature for sure. They just don't probably want to tell you openly.
If you use Rithmic you can set it by yourself (see pic below) and you can see that the introducing broker can simply set a limit that won't be modifiable by you. As you can see in the picture below there are 3 tabs, the risk parameters set by the traders are modifiable by you, the other two tabs are for the IB and for the FCM.
Thank you everyone for your help and advice. I called the brokerage department at Ninja Trader and they told me this option was available and instructed me on how to set it up. Not sure why regular support told me there was no way to do it.
Again, many thanks for the help everyone!
Yeah for whatever reason everyone seems to make this feature incredibly difficult to find.
I've email Ninja in the past asking them to set a max loss for my day that they execute - it works, but keep in mind that it won't close you out of a trade once you hit your limit. It'll only kick in once you've closed a trade that takes you past that limit. So, if you're not careful you can still end up with a bigger loss.
The Rithmic solution is better because it'll close you out automatically. Took me literally years to find this stupid fix...
In my experience, problems like the one you are describing (and is very common) are often rooted in subconscious issues - self-sabotage etc.
In your attempt to "block yourself via software limits, you are looking for a mechanical solution to a mental-oriented problem.
The problem with that is that if you try to "bypass" yourself by using mechanical protection rather than face the real issue straight out,
it is likely to manifest in another way.
If you have some subconscious self-sabotaging streak for any reason (and many people do), trust your mind to find the way to manifest it.
There are a million other ways to ruin your profitability, and your mind will just find another solution.
My suggestion - don't run away.
Face it, deal with it, work through it and never look back.
Wow!! very insightful comment, I couldn't agree more. I have limited my losses mechanically in the past, now I manage to stop before reaching the mechanical limit. However I very often perceive this sort of "self-sabotage" desire, it is sort of a need for autodestruction.
I don't know the causes of it, maybe it is linked to a desire to "keep learning" and to keep having a dream of "being a trader / becoming rich / breaking free etc..." rather than materialize the dream.
I don't know how to justify the self-sabotage and above all I don't know how to overcome it.
Can you suggest some ways to deal with it? is there anything else we can do a part from just recognizing the problem?
Also can you suggest some books on the topic?
While I agree with the sentiment that having a "mechanical solution to a mental problem", learning about the broker-side max loss/liquidation level is very helpful and I might implement this. Having a maximum loss, and even a maximum gain that is hard enforced by the broker (i.e. out of your reach to change/disable) would make it physically impossible to overtrade after a max loss, and might serve as the first step towards changing the mental problem. Sometimes an abstract concept needs a concrete solution, at least to start.
Does Ninjatrader simply prevent you from trading after hitting the established loss level? And they enforce this after any trades are closed? That would be perfect, as I wouldn't want a trade to be closed on my behalf based on the unrealized p/l.
