loss taking
Can anyone please give me some advice on how to train yourself/ mind to take a loss? I`ve read lots of stuff on the web about trading and all the pros talk about shrugging there shoulder and moving on or just cutting out and waiting for the next trade to come along which all sounds so simple but no matter how hard i try if i have a loss i want to gamble my way back to zero.
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convoysur-2
- Posts: 1110
- Joined: Thu Jan 12, 2012 10:00 am
greg,
if you dont knock this on the quickly your going no where..
take the loss you will make it up in the next 1-2-3 races.
dont go in running to get it back.you will lose long term.
its all a bit of personal psychology we all have to deal with,
marc
if you dont knock this on the quickly your going no where..
take the loss you will make it up in the next 1-2-3 races.
dont go in running to get it back.you will lose long term.
its all a bit of personal psychology we all have to deal with,
marc
To be honest Greg, I think this is the hardest thing about trading. It's more difficult than making consistent greens, or creating sophisticated bots etc.
Most of us here have gravitated from being a punter in days gone by. When you 'red up' for a trading loss, it goes against our natural instincts as a punter because you don't even get a run for your money, so you try and gamble your bank back
Do you remember the Kevin Bacon film 'Hollow Man'?
His character had a message on his ceiling "You should be working" - I copied this idea and had a message on my ceiling about never letting a trade go 'in play'
There are some intelligent people who have failed at this game, and I suspect this mental hurdle is one of the most common reasons for failure.
When a trade went wrong and I started to feel a gambling tendency gripping my testicles, I got into a routine of redding up, grabbing my coat & going for a walk, or I'd visit the coffee shop near me. After 15-20 mins I'd come back refreshed to start again, but at least I hadn't gambled my bollocks.
Eventually, I trained my brain to just embrace a red, as a nice fat green was just around the corner
Most of us here have gravitated from being a punter in days gone by. When you 'red up' for a trading loss, it goes against our natural instincts as a punter because you don't even get a run for your money, so you try and gamble your bank back
Do you remember the Kevin Bacon film 'Hollow Man'?
His character had a message on his ceiling "You should be working" - I copied this idea and had a message on my ceiling about never letting a trade go 'in play'
There are some intelligent people who have failed at this game, and I suspect this mental hurdle is one of the most common reasons for failure.
When a trade went wrong and I started to feel a gambling tendency gripping my testicles, I got into a routine of redding up, grabbing my coat & going for a walk, or I'd visit the coffee shop near me. After 15-20 mins I'd come back refreshed to start again, but at least I hadn't gambled my bollocks.
Eventually, I trained my brain to just embrace a red, as a nice fat green was just around the corner
You have to take losses its part of trading, trading 100% is not possible, trading is about concerntrating on how much you lose the wiining ones would look after themselves. If a trade go,s 3 ticks behind my entry am out, it took some time i must admit to do this as smoothly as i do without no emotion. Losses will happen, because i trade a 1-2 ratio system they really dont bother me, as i can get 5 wrong and 5 right and i still make a profitgreg wrote:Can anyone please give me some advice on how to train yourself/ mind to take a loss? I`ve read lots of stuff on the web about trading and all the pros talk about shrugging there shoulder and moving on or just cutting out and waiting for the next trade to come along which all sounds so simple but no matter how hard i try if i have a loss i want to gamble my way back to zero.
Read 'Trading in the Zone' by Mark Douglas. In it a chapter on 'reacting to loss'. Its a great book for all traders.
Try to lean something from every loss. Even the most successful stratergy has them - in the end if you develop an edge they just become part of business.
Try to lean something from every loss. Even the most successful stratergy has them - in the end if you develop an edge they just become part of business.
Thanks for the replies folks. I have read trading in the zone and yes its a great book,i will have to reread it i think. I`m fully aware of the "why" to take a loss it`s just the how that i struggle with, maybe i haven`t quite left the gambler in me far enough behind yet? and as most of you have been gambles at some point in the past any futher tips on how to do that would be gratefully recieved. thanks again to all greg
I totally agree with Letiss. And that also comes from the fact that in trading you are your own boss/employee. When you make profit you are the employee and your boss is happy. When you make a loss than you're the boss and nobody can punish you. Think of yourself as an employee. You can go even one step further. Let your wife/girlfriend be your boss 
Personally I do not prefer to show my p&l to anybody. But I understand the bloggers who post them for a motivation boost.
Personally I do not prefer to show my p&l to anybody. But I understand the bloggers who post them for a motivation boost.-
convoysur-2
- Posts: 1110
- Joined: Thu Jan 12, 2012 10:00 am
i read this on a blog this morning though it is relevant to most of us....
(it can be tempting not to take the hit but to let it roll and take your chance, or the back the horse back or lay back in–running is tempting because lets face it a lot of favourites do lose so the statistics are in your favour – except when you decide to let it roll take my advice if you lay the favourite and let it roll it will win and if you back the favourite and let it roll it will lose – The Trading Gods ensure that this happens to punish us for being weak, just take the hit go away have a cup of coffee and start again. You can also look at it like this to valet a car costs £30 or so – so to take a £30 or £60 hit is one or two cars to valet and we know that’s hard work, but to let it roll and maybe lose £200 or £300 that’s going to be a lot of cars and a lot of elbow grease so if you look at it that way you are actually taking the easier option by redding up or greening up.)
marc
was laughing my ass off reading the bit about the trading gods..its so true
(it can be tempting not to take the hit but to let it roll and take your chance, or the back the horse back or lay back in–running is tempting because lets face it a lot of favourites do lose so the statistics are in your favour – except when you decide to let it roll take my advice if you lay the favourite and let it roll it will win and if you back the favourite and let it roll it will lose – The Trading Gods ensure that this happens to punish us for being weak, just take the hit go away have a cup of coffee and start again. You can also look at it like this to valet a car costs £30 or so – so to take a £30 or £60 hit is one or two cars to valet and we know that’s hard work, but to let it roll and maybe lose £200 or £300 that’s going to be a lot of cars and a lot of elbow grease so if you look at it that way you are actually taking the easier option by redding up or greening up.)
marc
was laughing my ass off reading the bit about the trading gods..its so true
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JollyGreen
- Posts: 2047
- Joined: Sat Mar 21, 2009 10:06 am
Imagine it like a game of golf, even if you don't play the game, just watching the pros will highlight what I mean.
You hit a drive and it clatters into the trees. When you get to the ball there is a small gap in the trees which will allow you to reach the green. However, the gap is small and it is going to need a near miracle shot.
The good pro will simply decide it is not worth the risk and will take a wedge and pitch it back onto the fairway. He/She will then play a shot to the green and hope to make a decent putt. They may get a par but at worst they should drop 1 shot. In the scheme of things, dropping 1 shot is not the end of his/her tournament and this is often referred to as "taking your medicine!"
The section above describes taking a loss and how the professionals will deal with it.
Now let's look at the player who decides they can make the miracle shot and decides to risk it. This can apply to pro and amateur and the result is pretty much the same. They smash a 3 iron low under the blocking trees aiming for gap between the trunks and below the overhanging branches. There is a sudden clatter of wood as the ball pings off a tree trunk and disappears deeper into the trees. Now the ball could go OB (Out of Bounds) so there is an immediate penalty. The ball could strike the player for a penalty, it could end up unplayable. This player then ends up with a 7 or 8 on their card and that is the end of their chance. I think you get the message, the risk is simply not worth it and a potential par escape or a 1 shot loss by "taking your medicine" is by far the best option.
Now we always see the miracle shots from Seve, Mickelson etc replayed on TV but they don't come off very often and nobody will want to see a replay of the time when they make a triple bogey going for the miracle shot. Just Google Jean Van de Velde and see how going for a miracle shot cost him a place in Golfing history and handed Paul Lawrie his major success. Actually here is a video link Major Collapse
So rather than take the risk and hope for a miracle recovery, take your medicine, regroup and start again.
Watch the US Open currently in progress and watch how the best players navigate around the course and "take their medicine" as they will be contending for the title.
You hit a drive and it clatters into the trees. When you get to the ball there is a small gap in the trees which will allow you to reach the green. However, the gap is small and it is going to need a near miracle shot.
The good pro will simply decide it is not worth the risk and will take a wedge and pitch it back onto the fairway. He/She will then play a shot to the green and hope to make a decent putt. They may get a par but at worst they should drop 1 shot. In the scheme of things, dropping 1 shot is not the end of his/her tournament and this is often referred to as "taking your medicine!"
The section above describes taking a loss and how the professionals will deal with it.
Now let's look at the player who decides they can make the miracle shot and decides to risk it. This can apply to pro and amateur and the result is pretty much the same. They smash a 3 iron low under the blocking trees aiming for gap between the trunks and below the overhanging branches. There is a sudden clatter of wood as the ball pings off a tree trunk and disappears deeper into the trees. Now the ball could go OB (Out of Bounds) so there is an immediate penalty. The ball could strike the player for a penalty, it could end up unplayable. This player then ends up with a 7 or 8 on their card and that is the end of their chance. I think you get the message, the risk is simply not worth it and a potential par escape or a 1 shot loss by "taking your medicine" is by far the best option.
Now we always see the miracle shots from Seve, Mickelson etc replayed on TV but they don't come off very often and nobody will want to see a replay of the time when they make a triple bogey going for the miracle shot. Just Google Jean Van de Velde and see how going for a miracle shot cost him a place in Golfing history and handed Paul Lawrie his major success. Actually here is a video link Major Collapse
So rather than take the risk and hope for a miracle recovery, take your medicine, regroup and start again.
Watch the US Open currently in progress and watch how the best players navigate around the course and "take their medicine" as they will be contending for the title.
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steven1976
- Posts: 1744
- Joined: Tue Jan 19, 2010 6:28 am
I agree with Jolly and here is the safe chip out! https://www.youtube.com/watch?v=10jORLi ... ata_player
Movies, books, bosses and girlfriends, golf and car valeting and who says that BF traders are a boring lot. Lots of great advice there Greg and here is my take.
At some stage of trading the novice has certain things click into place and they begin to realise that they can win a fair few races in a day whilst they may lose in some others. The key to trading is to go away from the PC and evaluate the viability of their strategy in terms of:
a) what an average win amount is with a consistent stake
b) what %age of races they can win on average in a day/week/month
c) what %age of races they lose in and what are the losing amounts.
Only when you have this data will you see that trading is a plus and minus game and only then can you start to gain the confidence necessary to realise that you know how to win, therefore the losing is of little consequence.
Where a strategy is developed that has huge swings of wins and losses of disproportionate size or where many small wins can be wiped out by a single large loss then you need to fine tune the strategy until it becomes a very clear and definable set of plusses and minuses where the net balance is positive.
Confidence that you can pull out winning trades of a certain size with a certain stake is vital to accepting that you, on the other hand, can accept a losing trade of a certain size where the overall result leads to a profit. If you do not have the confidence or strategic ability to be able to repeat over and over again a series of winning trades during the course of 4 hours, you will never be able to accept that you are allowed to lose in some races without feeling the need to chase the losses.
As a format representative/ typical of a trading day you can expect to trade 22 races having profited in 17/18 and losing in 4/5 where those losing races should be no bigger than your best winning trade. Getting close to this formula (in practice mode) will give you all the confidence you need to start trading for real and permit you to "accept" that losses are not only acceptable but desirable for the purpose of being a constant reminder that no human is perfect or ever can be in execution.
Good luck
At some stage of trading the novice has certain things click into place and they begin to realise that they can win a fair few races in a day whilst they may lose in some others. The key to trading is to go away from the PC and evaluate the viability of their strategy in terms of:
a) what an average win amount is with a consistent stake
b) what %age of races they can win on average in a day/week/month
c) what %age of races they lose in and what are the losing amounts.
Only when you have this data will you see that trading is a plus and minus game and only then can you start to gain the confidence necessary to realise that you know how to win, therefore the losing is of little consequence.
Where a strategy is developed that has huge swings of wins and losses of disproportionate size or where many small wins can be wiped out by a single large loss then you need to fine tune the strategy until it becomes a very clear and definable set of plusses and minuses where the net balance is positive.
Confidence that you can pull out winning trades of a certain size with a certain stake is vital to accepting that you, on the other hand, can accept a losing trade of a certain size where the overall result leads to a profit. If you do not have the confidence or strategic ability to be able to repeat over and over again a series of winning trades during the course of 4 hours, you will never be able to accept that you are allowed to lose in some races without feeling the need to chase the losses.
As a format representative/ typical of a trading day you can expect to trade 22 races having profited in 17/18 and losing in 4/5 where those losing races should be no bigger than your best winning trade. Getting close to this formula (in practice mode) will give you all the confidence you need to start trading for real and permit you to "accept" that losses are not only acceptable but desirable for the purpose of being a constant reminder that no human is perfect or ever can be in execution.
Good luck
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convoysur-2
- Posts: 1110
- Joined: Thu Jan 12, 2012 10:00 am
thanks to james and jolly.
2 more excellent pieces added to the forum.
and far from a boring lot.
2 more excellent pieces added to the forum.
and far from a boring lot.
There has to be some kind of risk management yes, but for me, at least, stop-losses are not the answer, and under no circumstances will I ever use them again. I never got to grips with stop-lossing at all.
Of course, the basic concept sounds simple: 'get out when you've got it wrong'. In practice it's complex. The devil of course, is in the phrase 'when you've got it wrong'. In practice it is actually quite hard to tell whether the market is moving against you. There are all sorts of false triggers: gaps in the market, temporary resistence, random price flucuations and price manipulation, to name some complicating factors.
Like I said, I never got to grips with stop-lossing at all, so I refuse to use them.
Of course, the basic concept sounds simple: 'get out when you've got it wrong'. In practice it's complex. The devil of course, is in the phrase 'when you've got it wrong'. In practice it is actually quite hard to tell whether the market is moving against you. There are all sorts of false triggers: gaps in the market, temporary resistence, random price flucuations and price manipulation, to name some complicating factors.
Like I said, I never got to grips with stop-lossing at all, so I refuse to use them.
Sometimes you can make the miracle shot. Last year, I bought $18 worth of tickets in the national lottery draw; with that spend, the odds of me winning 35K in that lottery draw were 40 000 - 1. I made it.You hit a drive and it clatters into the trees. When you get to the ball there is a small gap in the trees which will allow you to reach the green. However, the gap is small and it is going to need a near miracle shot
Sometimes you can hit the hole-in-one or draw the straight flush. It's a fantasic feeling- magical almost- it is as if the hard boundaries of reality itself have disintegrated before your very eyes and you've entered a dream. Such moments the gambler lives for.
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convoysur-2
- Posts: 1110
- Joined: Thu Jan 12, 2012 10:00 am
this is the best article i have ever read on trading and loss taking ,its simple a fantastic piece of work and so well put togeather ,the pros already know all this they write about it here all the time ,but this is every thing any one needs to know about trading,i hope euler you dont mind me posting it ,its just a link to an article NOT a blog or any thing so wont take trafic from here ,this will help alot of people to no end,some one posted it on mugs blog,i feel the need to past it around for all those who are having problems with there trading .
ENJOY,
https://sites.google.com/site/sportztra ... ce-trading
ENJOY,
https://sites.google.com/site/sportztra ... ce-trading