Reds are an inevitability. But the acceptance of reds is a skill that many find hard to master.
What are the various components that make up that skill, in your opinion?
If taking and accepting a red is a skill, then what are the components that make up that skill?
I think it's a bit like sadomasochism (so I'm told)
The first time you get whipped it hurts like hell, so you try to avoid it happening again.
But the more you get whipped the more you can cope with it and eventually it doesn't feel right if you don't get a little whipping now and again.
I jest..
Basically, to start with, taking a loss is painful. But the thousandth loss won't even register, so the more you get used to it. The better you will be able to trade.
The first time you get whipped it hurts like hell, so you try to avoid it happening again.
But the more you get whipped the more you can cope with it and eventually it doesn't feel right if you don't get a little whipping now and again.
I jest..
Basically, to start with, taking a loss is painful. But the thousandth loss won't even register, so the more you get used to it. The better you will be able to trade.
I don't regard it as a skill, more of a judgement. You open a trade to make a small profit or small loss, with no intention of risking your entire trade. If the market goes against you, that judgement hasn't changed. To let the bet run would be exactly the same as random betting that is guaranteed to lose in the long run. An understanding of this is all that's required.arbitrage16 wrote: ↑Thu Nov 10, 2022 12:54 pmReds are an inevitability. But the acceptance of reds is a skill that many find hard to master.
What are the various components that make up that skill, in your opinion?
Luckily for me, I've always feared blowing my bank more than making a small loss so I didn't have much trouble getting used to it.
Taking a loss will aloow you to get comfortable with the process. If you can get comfortable you are likely to be able to take more speculative positions and that in turn will help you find more opportunities.
Learning to take (appropriate) risk is a real skill and a very valuable one.
Learning to take (appropriate) risk is a real skill and a very valuable one.
Acceptance and Practicearbitrage16 wrote: ↑Thu Nov 10, 2022 12:54 pmReds are an inevitability. But the acceptance of reds is a skill that many find hard to master.
What are the various components that make up that skill, in your opinion?
expected loosing runs
- calculate the strike rate SR% . then it's easy to know how many of the reds you expect to encounter in one go.....then relative to your bank adjust your stakes accordingly . make sure to take BSP as your closing position ( BF crashes are real and that's a hidden red )
exactly... i used to obsess over the losers until i framed the market mentally as a breathing ecosystem. there will be nice large exhalations as well as many sharp intakes of breath. look to keep the EV+ and by all means look at how to trim the losers but accept that it's always going to be there and if automating, just let things run as PLANNED.decomez6 wrote: ↑Fri Nov 11, 2022 12:40 pmexpected loosing runs
- calculate the strike rate SR% . then it's easy to know how many of the reds you expect to encounter in one go.....then relative to your bank adjust your stakes accordingly . make sure to take BSP as your closing position ( BF crashes are real and that's a hidden red )
[edit] - one thing that i'm sure many overlook is that on a level playing field, you'll actually make money by adopting an approach that looks to take maybe a 10% gain and accept a 7% loss. research which %age balance works for you. i do exactly this in my kucoin futures *bets* (albeit on fractional percentage gains on a psuedo hft basis)
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looks like a Kelly to mejimibt wrote: ↑Fri Nov 11, 2022 12:45 pmexactly... i used to obsess over the losers until i framed the market mentally as a breathing ecosystem. there will be nice large exhalations as well as many sharp intakes of breath. look to keep the EV+ and by all means look at how to trim the losers but accept that it's always going to be there and if automating, just let things run as PLANNED.decomez6 wrote: ↑Fri Nov 11, 2022 12:40 pmexpected loosing runs
- calculate the strike rate SR% . then it's easy to know how many of the reds you expect to encounter in one go.....then relative to your bank adjust your stakes accordingly . make sure to take BSP as your closing position ( BF crashes are real and that's a hidden red )
[edit] - one thing that i'm sure many overlook is that on a level playing field, you'll actually make money by adopting an approach that looks to take maybe a 10% gain and accept a 7% loss. research which %age balance works for you. i do exactly this in my kucoin futures *bets* (albeit on fractional percentage gains on a psuedo hft basis)
typicalpandlbalance.PNG
without the R. 
I think Peter already summed it up really well there, accepting losses and minimizing them are skills that you need to build tolerance for, through exposure. And the more comfy you get with the process the more market opportunities you unlock, very true. The more scars you have the more pain you can tolerate etc.
You could spin it in a number of ways, technically losses are just red numbers on a screen that you're expected to make up later anyway. If you're not yet confident in your ability to do that then that makes accepting losses that much more difficult in the first place. With each loss you do get an opportunity to slightly tweak your approach and hone your market reading skill further etc, which will in turn help you extract more profit in the future.
Obviously, novice manual traders without a set stoploss have it the worst for sure, they have to take more losses more often and this constant process can be extremely mentally draining.
Can try and laugh it off, even though it seems impossible at times, a random idea I sometimes get is to do a forced laughter Technically, that should still release some "feel good hormones" and help you get over it.
Just spitballing further here but you could think of it as every potential trading opportunity having an entry fee (to a rollercoaster ride? lol), that you willingly pay for with the click of a mouse, but then it's up to you what you make of that opportunity. So even if you don't get anything out of it and are just left with the "fee" you are at least richer for the experience.
Spin it however it suits you, as long as you get the job done.
You could spin it in a number of ways, technically losses are just red numbers on a screen that you're expected to make up later anyway. If you're not yet confident in your ability to do that then that makes accepting losses that much more difficult in the first place. With each loss you do get an opportunity to slightly tweak your approach and hone your market reading skill further etc, which will in turn help you extract more profit in the future.
Obviously, novice manual traders without a set stoploss have it the worst for sure, they have to take more losses more often and this constant process can be extremely mentally draining.
Can try and laugh it off, even though it seems impossible at times, a random idea I sometimes get is to do a forced laughter
Technically, that should still release some "feel good hormones" and help you get over it.Just spitballing further here but you could think of it as every potential trading opportunity having an entry fee (to a rollercoaster ride? lol), that you willingly pay for with the click of a mouse, but then it's up to you what you make of that opportunity. So even if you don't get anything out of it and are just left with the "fee" you are at least richer for the experience.
Spin it however it suits you, as long as you get the job done.