[mule1976]

Hi all,

I have been trading off and on for a few years now, and have not been profitable, but I feel like lately I've making some progress and improving except for one big problem. If I have a few losses in a row, I NEED to get that money back, and won't stop trading until I do. As you can imagine, I start to take trades that don't fit my system, start trading larger size, etc., making back some of the money, then losing that and more. I guess this is what some call revenge trading, or trading on tilt.

Last week this happened again, and I had my biggest losing day ever. This has only happened the last 6 months or so of trading. I think it's because I haven't been improving as much as I think I should be, and want to prove to myself I can make money. A few times it was because I fell below $25,000 and wanted to make back the money to avoid margin calls (stupid I know, and yes I am undercapitalized).

This is so frustrating, because when I do this, 95% of the time I end up losing more money, but I can't seem to stop myself from doing it. Then I can't really evaluate my set ups, because I end up taking so many sub par trades that don't really fit my rules.

How have you guys dealt with this problem? In the past, I have stopped trading and gone back to paper trading. Of course this never happens when I paper trade, and I am able to make money. I know I need to be focused on the process and not the money. But it's not easy. Any ideas?

Thanks,

Ben

[Soultrader]

In order to overcome this, a buddy of mine trades 1 semi-automated strategy on a daily basis. This has allowed him to trade without emotions. My first year I went through the same mistake of having my emotions take over my actions. To overcome this, I spent alot of time reflecting on my own personality and discovering many bad habits that I possessed. From then it was a gradual process of fixing these traits and also admitting to them.

Having a sound strategy that you are confident with will eliminate the necessity to place trades that do not fit your style. Having a solid trading plan will also assist in this process. Perhaps you may want to take a step back and paper trade for some time to build back your confidence as well as discover strategies that you would want to take. Eliminate the noise. Hope this helps.

[DugDug]

ditto - factor something into your plan of how to deal with this - eg; walk away. turn off the computer.

Another one is implement a checklist that you physically tick off before doing a trade. And actually read and ask yourself is this a revenge trade - if the answer is yes - dont trade.
All you are trying to do is introduce muscle/brain memory to avoid these situations.

[bakrob99]

Originally Posted by mule1976 »

Hi all,
....This is so frustrating, because when I do this, 95% of the time I end up losing more money, but I can't seem to stop myself from doing it.....
Ben

Welcome to the world of learning about yourself. Most traders have had to deal with this issue and ultimately for me, it boiled down to fully realizing and understanding that I would never achieve the success I very much wanted without the discipline to trade my plan according to its rules and not my emotions.

You need to reflect long and hard on what is behind this behaviour.

[rs1]

A couple of ideas for you to think about. These are things which helped me but everybody is different.

Give yourself a max loss per day and make it a percentage of account or absolute number that you are comfortable losing. If you hit that number, even if it is in the first five minutes of trading, switch the computer off and get up.

Allow yourself to only make one trade per day. If the trade is a winner, great, if not then take the loss (which again should be an amount/ percentage you are comfortable losing) and take the rest of the day off.

These obviously require a certain amount of self discipline to enact. They should help improve your mindset if you follow them, as they try to get and keep you in a positive mindset by not trading too much and by not letting your losses get out of hand.

Again, just a couple of ideas, everybody has a different way of approaching things.

Best of luck

[FXGirl]

Dear Mule1976:

Would you mind giving us more information? In answering questions 4, 5 and 6, please don’t try to give a logical or rational reason, just give us what you are saying to yourself about this.

1. “I have been trading off and on for a few years now, and have not been profitable…” Please tell us why you haven’t been profitable and if you trading with a system you know works? Do you have a written trading plan?
2. “I feel like lately I’ve been making some progress and improving…” In what areas have you been improving? What is responsible for the improvement?
3. “If I have a few losses in a row…” How many losses or amount of money lost triggers this behavior?
4. “This has only happened the last 6 months…” What changed in the last six months with you, your situation, or what people are saying about your trading?
5. “I think it’s because I haven’t been improving as much as I think I should be….” What is your thinking about how much you should have improved or where you should be in you trading career?
6. “….and want to prove to myself I can make money” Please say more about this.

I know that some of these questions may be pretty personal, but if you are willing to share this information, maybe we can help you unwind the “I NEED to get that money back” so you can stick to taking trades that follow your system.

There are some good suggestions on this thread already. Any that resonate with you?

Best Regards
FxGirl

[maxima]

Originally Posted by DugDug »

ditto - factor something into your plan of how to deal with this - eg; walk away..

If he could walk away he would.. but then why is he asking?

buy yourself a trained monkey. when the chimp see -$5000 anywhere on the screen he beats you bad so you have to run away for day or two

I am sure you will find this expense very worth to make.

[DugDug]

maxima - i think a very simple example of walking away might be cheaper, easier, and less painful than a trained monkey.
its the same advice - give yourself something (a trick, a trigger, a trained response) to avoid the errors - and why not try something simple first? sometimes its not that obvious and there is no need to discount the obvious.....unless of course you like to make things more difficult than they might need to be.

I am sure FX girl will help him out, she is very good at offering more detailed advice.