Crisis periods in trading or when to expect losses? | Forex Factory

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Crisis periods in trading or when to expect losses?

  • #1
  • First Post: Apr 13, 2021 10:41am Apr 13, 2021 10:41am
Are there critical areas of experience when we need to be careful?

I suggest the following:

6-10 months after the start, when the confidence is not supported by experience.

3 years of experience, when you have a basic set of knowledge, experience and skills, but are not sophisticated to become a professional. A period of disappointment because of average results.

7-10 years of experience makes it clear that there is nothing special about trading. The crisis makes you think about what has been achieved and sometimes it leads to leaving.

What do you think?

additions are welcome, discussion is welcome, respect is mandatory, offense is prohibited.
  • #2
  • Apr 15, 2021 3:42am Apr 15, 2021 3:42am
You can't easily compare years in the market because 1 year full time professional > 1 year full time retail > 1 year sticking on a trade or two after work but I get the idea. Three things I've seen over the years...

1 - the mentor phenomenon. A bit of success and there's a tendency for everyone to impart their knowledge, take new students etc. All of this is completely natural but it's dangerous, because it feeds the ego and I've seen people on the verge of success shudder to a halt at this point because they stop asking questions. Remember Darkstar? He'll never know how close he was.

2 - the instinct delusion. If your rules can't be programmed (I'm not saying you should automate everything but if you can't define them), then you're trading on a set of rules that you only know subconsciously. You either spend the time finding out what they are, or you'll find them torn apart when you go on tilt after a few losses.

3- the market follower. If you've a strategy and you don't understand structurally why it works (eg some kind of MA cross combined with PA whatever), then you can get a year or two of it working, you'll think you've cracked it, then it'll fall apart. This is Taleb's black swan. Entire careers are made out of this delusion, where the market exhibits temporary phases for weeks, months and even years. And then it stops. Back to square one
  • #3
  • Apr 19, 2021 6:03am Apr 19, 2021 6:03am
Quoting triphop
You can't easily compare years in the market because 1 year full time professional > 1 year full time retail > 1 year sticking on a trade or two after work but I get the idea.
Hello triphop, thanks for the reply.
you are right.., the trading experience (actually, its density) depends on the involvement in the process. And for someone, one day is 1 hour of trading, and for another one, 1 day is 24 hours of trading. Perhaps I meant a trader who trades on the main base.
  • #4
  • Apr 19, 2021 6:08am Apr 19, 2021 6:08am
Quoting triphop
1 - the mentor phenomenon. A bit of success and there's a tendency for everyone to impart their knowledge, take new students etc. All of this is completely natural but it's dangerous, because it feeds the ego and I've seen people on the verge of success shudder to a halt at this point because they stop asking questions. Remember Darkstar? He'll never know how close he was.
2 - the instinct delusion. If your rules can't be programmed (I'm not saying you should automate everything but if you can't define them), then you're trading on a set of rules...
thanks for the interesting psychological moments that you shared.
I would like to emphasize point 3 because it seemed very familiar to me. It's very important to understand and very important for the strategy building, because one strategy cannot bring profit indefinitely.

How about this add-on:
?
- Period of change. A trader who suffers a period of failures begins to think about changing the strategy and launches a mechanism for constantly searching for the best strategy, changing conditions and trading tactics. However, the solution could be a regular adjustment of the first strategy, or a temporary break.
  • #5
  • Apr 19, 2021 6:25am Apr 19, 2021 6:25am
It's not about time, it's about the number of executed trades according to system rules. Those are real decisions you take that form your trading. But even if you dailytrade and execute 10+ trades per week it takes years to adapt to market craziness and figure out the system to include all possible outcomes. That's why i test/trade on 1min, I know my system (or certain value) isn't good for that asset within a month max because all it takes is one bad day, in case of mid-long term traders its one bad week/month. Trading (even just for the purposes of system testing) low tf saves a lot of time.

It is also important to create all sorts of statistics around the system, I'm even watching the optimal daily hours. Minimum number of trades should be at least 200 to properly evaluate the system which in case of swing traders can be a whole year and a lot can change on the market in one year.
  • #6
  • Apr 20, 2021 6:40am Apr 20, 2021 6:40am
Quoting Barrg1
{quote} thanks for the interesting psychological moments that you shared. I would like to emphasize point 3 because it seemed very familiar to me. It's very important to understand and very important for the strategy building, because one strategy cannot bring profit indefinitely. How about this add-on: ? - Period of change. A trader who suffers a period of failures begins to think about changing the strategy and launches a mechanism for constantly searching for the best strategy, changing conditions and trading tactics. However, the solution could...
Ah yes... mostly yes. But this only applies to temporal edges. They come and go, they make a lot of people money in the short term, but if you're not in charge of them (fixing the fix, NFP manipulation, Frankfurt reversals, HFT strategies, even fundamental policy strategies etc) you're beholden to the people in charge and one day they'll stop.
There are structural edges and temporal ones. Structure doesn't change on day to day basis, and when it does the whole (professional) world is told well in advance. Temporal edges come and go.
  • #7
  • Apr 20, 2021 7:13am Apr 20, 2021 7:13am
Quoting Barrg1
Are there critical areas of experience when we need to be careful? I suggest the following: 6-10 months after the start, when the confidence is not supported by experience. 3 years of experience, when you have a basic set of knowledge, experience and skills, but are not sophisticated to become a professional. A period of disappointment because of average results. 7-10 years of experience makes it clear that there is nothing special about trading. The crisis makes you think about what has been achieved and sometimes it leads to leaving. What do you...
hello everyone,
I also believe you cannot take time dependence as a basis.
I would say that it is better to talk about events that can affect trading

  1. changing from demo to real trading
    due to completely different conditions
  2. changing from low lot to higher risks
    any change in strategy and risk management can be added here
  3. withdrawal of the first significant profit
    it is a strong emotional component. Many traders stop taking trading seriously, especially if the profit is more than 100%
  4. the appearance of followers and students
    affects head stuffing like a drug for overconfidence

Point of view is a common opinion, passed through the prism of experience
  • #8
  • Apr 26, 2021 9:54am Apr 26, 2021 9:54am
I experience a crisis every time external factors such as stress or fatigue appear. I do trading just like an art and as a creative person go through crises, even the weather can affect or bad dialogue. The very important point during such periods is understanding and accepting the fact that trading will not be profitable now. Take a break and return when inspiration appears.
  • #9
  • Apr 27, 2021 1:24am Apr 27, 2021 1:24am
Expect losses when, stubornly you are using the same system, ignoring market consensus and fundamental principles like, cutting losses short. Take a break, or join the new trend, but don't jump imediatly in a trade. Usually the sysstems work in a big (higher tmf) trend and when this trend changes, or consolidate the market needs time to develop a new trend. Avoid beeing greedy, you should be gratefull with what the market gives you, even with the less and have patience.
Looking for profitable short term trades ...|
  • #10
  • Apr 27, 2021 2:14am Apr 27, 2021 2:14am
1. When your trade was succesfull but you entered randomly. And it given you large profit. It's pure luck, but you think you great

2. Streak of wins. Better to relax away from the market

3. When you took great profit on single trade (unusual big for you). Dont give in to a good mood and think that you are invincible
  • #11
  • Last Post: Jun 29, 2021 5:36am Jun 29, 2021 5:36am
Don't worry about losing or making money while trading
It's just a numbers on the screen.
You just need to trade correctly.
Stay cool
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