Compounding my losses

Hi there, i have one big problem, after few loss, i want to rectify it and i do some trades out of plan, and consequently i do more loss making trades, i often stop when i have 10 loss....what is best protection for it? turn the computer off?

Thanks in advance

A lot of pain and sorrow in loss should help with the habit. Happy trading.

I went though a stage of doing this, in retrospect the problem was that I didn't really have a plan. I would fool myself that I did have a plan, it was something like 'trading opening breakouts on euro futures', but that's not a plan, it's an idea. What is your plan?

There's a good article which might help.

http://www.brettsteenbarger.com/Chan...0We%20Cope.doc

Read 1, 2 and 3. over and over again.
Important thoughts: (IMHO)

You will begin to change when you consistently hate your old ways.
The key to making this work is repetition.

good luck

oh, I forgot to say, Oanda is a good broker. I must say this coz that's why I get paid.

Keep doing what your doing and you'll find your answer, its just a matter of staying power.

Mack is teasing you a bit.

See my chart below. This is me scalping for almost 6 months, with no plan (see Craig's post above) and worst still, no discipline.

It is not alright to lose more than 10% of account balance in one day.
The market is different each day, some days it can be very accommodating to your style/method, and some days it will literally "shred" your account.

You just have to accept that. Trade more when you are doing well, on a profitable day. Do NOT try to trade out of your losing day. The "blue arrows" (huge declines) on that chart are from TRYING to trade out of losing days.

With issues and questions like these, you should be trading a maximum of 1% per trade. 5% loss on any single day is considered BAD. Stop at that point. Just turn off the computer. You can try again tomorrow.

If you make some money over time, then perhaps we can revise your numbers. (2% per trade +)

If you have instances where you lose 10% or more in a single trading day, then believe me when I say that you will never be consistently profitable doing that.

Don't be like me. Stop the madness!
Just trying to help.

Agree with everyone above. What Craig said about PLAN is vital. You need to put it all in perspective. Sounds like you want it all NOW. Christmas time is great for newer traders like that.

You might need to blow an account to truely wake you up. Thats what it took for me anyway.

I wrote this thread (post) a while ago about the same thing.

These days Im very diciplined

"i will NEVER trade again! i will NEVER trade again!" *shakey hand starts to reach for the mouse slowly*

Sounds like an addiction. If I dont trade its cause I know I dont know.

No shakey hands just shakey heads!

Spot on!

Before you even open a trade clearly lay out the following:

1. The reasons for opening the trade... (asking this question to yourself and answering it fully may bring some realizations as well)
2. The things that would invalidate these reasons clearly.
3. Clearly lay out your profit taking plan and loss cutting plan.

Any good trade has 3 components
1.Analysis
2.Trade Management
3. Exit plan

So do you have a plan in the first place or are you just convincing yourself that you have a plan.

I think most traders, myself included, have been through, or will go through, what you are describing. I wonder whether the "spiral of death" behaviour (trading outside the plan to make up for numerous losses) is a problem in itself, or whether it is just a symptom of a broader underlying cause(s)? Something to consider of you have not already...

Two simple ways to look at it (and no doubt there are many others) is that:

1) You either have a sound trading plan, but you have a discipline issue because you have not given that plan time to prove or disprove itself and therefore lack confidence in what you are doing and/or your expectations about the 'performance' of the plan and you is not realistic; or conversely

2) You have a crap trading plan that will inevitably cause losses and you are looking outside that plan because it is not worth the paper it is written on..

I have no idea whether any of the above applies to you, but for what it is worth my humble opinion is that most people assume that "1" applies to them, when actually "2" is far more likely.

This brings up the whole issue of what constitues a good trading plan, and what does not, and undoubtably this is a debatable issue as different things may work for different people, but once again, my humble opinion that trading plans, first and foremost, should be learning plans that outline a basic process of learning, documentation, improvement, etc that doesnlt just focus on the physical entry and exit criteria but also on the acquisition of knowledge, skills, experience and capabilities as a trader. What I am talking about here probably fits into a 3-5 year learning process... expectations of anything else I think are unrealistic and will indeed lead to dysfunctional behaviours.

Finally, you describe "ONE big problem", when it is quite possible that there are several underlying problems behind that behaviour. Get down to the cause(s) in a systematic, practical and ruthless way, and you may be well on your way again. Yes, and on a practical level as soon as you start to feel yourself heading into the spiral of death, STOP BLOODY TRADING and don't start again until you are confident you have identified and addressed some of the problems... the uknown unknowns will kill you - turn them into known unknowns and them do something about them!

Do you sense I am quite passionate about this issue?! Yes, I have definitely been there myself.

All the best!

Thanks everybody interested, who tried to help me. I think i have quite good and profitable plan, (because despite of this issues, i am always quite profitable). But it has a bad psychological impact on me. I try to include into my plan, if i do 2 or 3 consecutive loss, i will stop for this day. Have somebody better idea?

I had some bad experience with currency, but nothin compared the collossus losses from Crude Oil
Losing almost 50% of my account in 1 day trade against the trend. It felt like there's a devil within my soul. I can't remember why I did it.
All I know Crude Oil moved 3500cent intraday, that's double the usual range. From there, I was like a broken machine. Diving equity curve, losses to losses. Now even I was not recovered.