Surviving a Drawdown: 7 Steps | Forex Factory

  • Surviving a Drawdown: 7 Steps

    From newtraderu.com

    A draw down is a normal occurrence for a trader. Swing traders experience them in trending markets, trend traders experience them in choppy markets, day traders experience them in markets that whip saw violently, and growth investors experience them in bear markets and corrections. the key to surviving them is staying disciplined in your entries and exits. Only take valid entries and always cut your losses at predetermined spots where you are proven wrong. If you are gunning for high returns then you can expect draw downs that are about half your return rate. A draw down is a function of the market not being ... (full story)

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Gaaikema
Oct 16, 2012 1:59am
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Can't read these things often enough. In my first two years of trading I've been hitting my head many times against the wall for making the same mistakes again and again and killing an account (again). But eventually you learn.
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Mingary
Oct 16, 2012 12:57am
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Useless platitudes
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ianf0ster
Oct 16, 2012 1:43am
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Not quite useless, but elementary and optimistic to say the least. Drawdowns of ony 50% - if only it were so!
Why is the important rule about stopping trading for the day if experiencing an unexpectedly high drawdown (size dependent upon method's expectation and intestinal fortitude of trader) not included? This in invaluable as a means of enforcing a break to reflectupon if market has changed or if trader has not been following all their rules,
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