How to Cope with a Losing Streak | Forex Factory

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How to Cope with a Losing Streak

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  • How to Cope With a Losing Streak?
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  • #1
  • First Post: Oct 10, 2014 7:18pm Oct 10, 2014 7:18pm
I started trading live around 6 weeks ago. I'm a swing trader that currently uses the 4-Hr MACD system developed by Phillip Nell. It worked great for me on a demo account so I figured, hey, let's give this a shot.

September was an AMAZING month for me. I profited 30% of my account for the month, which given that my goal was 10% I was quite pleased with it as you would imagine. Given how well the USD performed in September, it wasn't hard to string together some winning trades.

Then... the correction, along with some bad Aussie cross trades, and next thing you know I've lost my last 8 trades in a row. I've given back most of what I made last month. Psychologically, this is obviously troubling. I've had a number of thoughts in terms of how to respond to it, and I guess I just wanted to seek a little feedback. How have you handled a bad run? I'm putting some options in a poll, vote for what you would do in my position!
  • #2
  • Oct 11, 2014 2:08am Oct 11, 2014 2:08am
Quoting Nico1359
I started trading live around 6 weeks ago. I'm a swing trader that currently uses the 4-Hr MACD system developed by Phillip Nell. It worked great for me on a demo account so I figured, hey, let's give this a shot. September was an AMAZING month for me. I profited 30% of my account for the month, which given that my goal was 10% I was quite pleased with it as you would imagine. Given how well the USD performed in September, it wasn't hard to string together some winning trades. Then... the correction, along with some bad Aussie cross trades, and...

hi a couple of points if I may

A 4hr system wont give you that many signals on a single pair so, you have to trade a basket, now for your system to work you have to take every signal on every pair you've traded so far in your basket .... get what i'm saying ?

Psychology in trading is huge, you haven't lost half your account only what you've made so shake it off

Don't trade too many pairs in your basket if your account (or head) cant handle it
Never said I was Batman,all I'm saying is you'll never see us together.
  • #3
  • Oct 11, 2014 4:47am Oct 11, 2014 4:47am
Quoting Nico1359
I started trading live around 6 weeks ago. I'm a swing trader that currently uses the 4-Hr MACD system developed by Phillip Nell. It worked great for me on a demo account so I figured, hey, let's give this a shot. September was an AMAZING month for me. I profited 30% of my account for the month, which given that my goal was 10% I was quite pleased with it as you would imagine. Given how well the USD performed in September, it wasn't hard to string together some winning trades. Then... the correction, along with some bad Aussie cross trades, and...
Well, first of all congratulations for your 30% in September. And I find it great that you had that october experience, cause what does trading come down to?
Protecting your capital. If you have a lot of September and October months then guess what: you will always stay at 0% or even go into the red.

Now you have two choices:

  1. trying to increase the amount of winners and / or the amount of money you make per winning trade OR
  2. trying to decrease the amount of losers and / or the amount of money you lose per losing trade

I give you a hint, don't try to go for the first option. Think hard how you can reduce your losers, while not interfering too much with winning trades. Right now you have a system with zero expectancy, you just have to tweak the system so it becomes a positive expectancy system. And only engaging in "sure" trades is a way of doing that.

Obviously if after 8 losing trades you are back where you started, you are doing something wrong. Any system out there will at one point reach the outer part of the bell curve and produce more losing trades than you planned for. But that is where capital protection has to be a vital part. Either reduce your lotsizes when in a losing streak, don't trade certain market conditions or whatever comes to your mind to avoid losing. It's always easier to avoid losing than to win again 30%.

And now to my last point: are you sure you have a positive exptectancy system in your hands? Or you just hope that you have one? There is a major difference between knowing and hoping.
And from my humble experience, buying systems or trading the ones posted in forums is always a mistake. Why do the sellers sell the system? Cause they are so generous or cause the only way to make money from this system is to sell it to newbs? The investing sea is full of sharks that try to separate you from your money: brokers, educators, system sellers, mentors and other traders.

  • #4
  • Oct 11, 2014 5:00am Oct 11, 2014 5:00am
well if you have a loosing streak the system or method of trading is definitely not working.so STOP trading that system and find another system. but am yet to see anybody making a loosing streak trading with the trend
  • #5
  • Oct 11, 2014 5:20am Oct 11, 2014 5:20am
Quoting ericnyamu
well if you have a loosing streak the system or method of trading is definitely not working.so STOP trading that system and find another system. but am yet to see anybody making a loosing streak trading with the trend

I'm not sure I can agree with this. 8 losers in a row is tough, but it's certainly not out of the question for even a decent trading system.

Look at the screenshots of those 8 trades you took, are there any patterns that are common amongst them?

Are there any ways that managing your stop differently would've helped minimise losses? If so, would that new rule have limited the profitability of your winners in September?

Could you add another filter to your trading system which says don't trade if X isn't happening. X could be prices position in relation to a moving average, the breaking of highs in a down-trend etc etc.

Just some things to consider. Certainly don't give up on your system yet, experiment with new rules or tweaks first.
  • #6
  • Oct 11, 2014 5:47am Oct 11, 2014 5:47am
Quoting ericnyamu
well if you have a loosing streak the system or method of trading is definitely not working.so STOP trading that system and find another system. but am yet to see anybody making a loosing streak trading with the trend
I've never heard such a bullshit advice. Maybe you should stay at the rookie forum.
  • #7
  • Oct 11, 2014 6:15am Oct 11, 2014 6:15am
Go back to demo trading, learn the strategy properly.
Why did those winning trades work ? What was different when you had the losing streak ?
How many trades were winners, what was your average lot size at this time ?
How many were losers, what was your average lot size at this time ?
Are you too aggressive with your lot size in respect of account size ?
How did you react when you started winning ?
How did you react when you started losing ?

6 weeks is not really long enough to test any strategy, so changing to another one will only result in the same outcome.
It never gets easier, you just get better
  • #8
  • Oct 11, 2014 9:56am Oct 11, 2014 9:56am
There's no perfect solution. Losing streaks could be simply a part of your trading system, or it could mean that the market conditions have changed in one way or another. Reducing your lot sizes after a losing streak, could actually be detrimental if you have a genuinely profitable system. Because after weathering a losing streak, your wins are going to be much smaller than your losses.
  • #9
  • Oct 11, 2014 10:33am Oct 11, 2014 10:33am
Quoting Nico1359
I started trading live around 6 weeks ago. I'm a swing trader that currently uses the 4-Hr MACD system developed by Phillip Nell. It worked great for me on a demo account so I figured, hey, let's give this a shot. September was an AMAZING month for me. I profited 30% of my account for the month, which given that my goal was 10% I was quite pleased with it as you would imagine. Given how well the USD performed in September, it wasn't hard to string together some winning trades. Then... the correction, along with some bad Aussie cross trades, and...
To me loosing streaks have nothing to do with trading systems, but only with your subconscious.
The science behind loosing streaks is deep and complex and only a few can really see/understand what it is all about, but it happen to everybody.

You make money, untill a point when things change and you start loosing money, loosing part of or all your profits, or even going in red before asking yourself "what the hell just happened??", like if during the loosing-streak period a part of you was just not there, or sleeping.

How to get out of it, here is my advice: Wake up!

Get back to the present moment, the profits you made before (or even part of your initial capital?) are now gone and that's it.
Stop thinking about them, they are no more.

The error that traders do when in a loosing streak, is to while they are thinking about recover their loss or their gone profits, they are in fact staying focused a few steps on the past.
Therefore, they cannot devote 100% of their focus on the present moment, the present market.
Now, if you try to drive a car with 1 eye closed, and you go fast, you are probably going to have some sort of accident.
In trading, when you are trading without being fully focused in the present moment, you are eventually going to make more losses.

More losses, less focus, even more losses, even less focus, and boom your account is gone before you even realize what the hell is happened.

Wake up from the loosing streak, and stay awake all the time, welcome to trading.
  • #10
  • Oct 11, 2014 10:38am Oct 11, 2014 10:38am
When I made the transition to Live FX trading a very similar thing happened to me, I had from memory 8 loses in a row! I hit 10% DD and immediately stopped and re-evaluated what on earth I was or wasn't doing and went back to Demo Trading.

As soon as I went back to my Demo Account I started making winning trades (as I did prior to my transition to Live Trading). We all read about how big the psychological aspect of trading is, my first day Live trading I had the pleasure of experiencing it for the first time and its effects.

Go back to Demo Trading and regain confidence in your system, I believe it is vital to have confidence in your trading strategy.
  • #11
  • Oct 11, 2014 10:54am Oct 11, 2014 10:54am
Quoting notimportant
{quote} To me loosing streaks have nothing to do with trading systems, but only with your subconscious. The science behind loosing streaks is deep and complex and only a few can really see/understand what it is all about, but it happen to everybody. You make money, untill a point when things change and you start loosing money, loosing part of or all your profits, or even going in red before asking yourself "what the hell just happened??", like if during the loosing-streak period a part of you was just not there, or sleeping. How to get out of it,...
it's losing not loosing
  • #12
  • Oct 11, 2014 11:06am Oct 11, 2014 11:06am
Quoting Custos
{quote} it's losing not loosing
Ahah oops.. my bad
  • #13
  • Oct 11, 2014 2:43pm Oct 11, 2014 2:43pm
None of the option will actually work.

 

  1. first of all calm down.
  2. think that the paper currency you lose is not more important then your life you can still earn and do much more.
  3. over come the greed and fear factor.
  4. after the above steps are done , look at your entries carefully and analyze them what you have done wrong ?
  5. now make plan
  6. implement plan
  7. repeat the process
  8. enjoy your success

  • #14
  • Oct 11, 2014 2:50pm Oct 11, 2014 2:50pm
how spaced apart were those 8 trades that made you give back your 30%? all happen in one day, or across a few days, or 8 days?

i don't know what your MM strategy is but giving back 30% in 8 trades means you risked 3.75% each time. you mentioned you were a swing trader, so if you're taking ~1 trade a day then that could be a reasonable calculated risk but you could scale that down a little depending on how frequently you're executing trades.

perhaps pre-determining how much % you will risk for a particular trading day and dividing that risk to allow for multiple entries but staying within the risk parameters.

also might be worth backtesting the strategy across other times when the USD strength wasn't rallying so hard to see how compatible the strategy is under different market conditions
  • #15
  • Oct 11, 2014 2:55pm Oct 11, 2014 2:55pm
Quoting Nico1359
I started trading live around 6 weeks ago. I'm a swing trader that currently uses the 4-Hr MACD system developed by Phillip Nell. It worked great for me on a demo account so I figured, hey, let's give this a shot. September was an AMAZING month for me. I profited 30% of my account for the month, which given that my goal was 10% I was quite pleased with it as you would imagine. Given how well the USD performed in September, it wasn't hard to string together some winning trades. Then... the correction, along with some bad Aussie cross trades, and...
30% in a month indicates you have been over leveraged. Of all the components comprising a successful forex trading strategy, the entry is the least important. This is because the markets can not be predicted with certainty by the participants. And those who have that knowledge cannot participate. Whether retail or professional, all traders are eventually caught by the market on the wrong side. What sets apart consistently profitable traders from the rest is that they know their way to climb out of these situations with sound money management and trade management skills. If one can do that, the profits will take care of themselves. In other words, concentrate on NOT LOSING money instead of profits. Concentrate on locked in profits NOT your balance or equity figures. Some tips in view of the above:

1. On a 4 hourly TF, use a SL of at least 100 pips.
2. Risk no more than 1% of your account on any one trade.
3. Consider hedging instead of SL.
4. Protect your risked amount by moving your SL to breakeven as soon as feasible (e.g. when profit is 1RR), take profits by closing positions partially and using trailing stops on the rest.
5. Don't open too many positions simultaneously. A profitable trade is funded with the money it's made you and not using margin from your account. Therefore, consider opening a new position only when all current trades have become profitable and locked in value is at least at breakeven.

Just my 2 cents. Hope it helps. Good luck.
The trader IS the holy grail.
  • #16
  • Edited 8:44pm Oct 11, 2014 8:18pm | Edited 8:44pm
I clicked on Keep on Doing What You are Doing - It will turn around. However, it is subject to these:

1. Your risk per trade is small, so small that you can survive 100 to 200 losing trades in a row without significantly damaging your account. Even after 100 losing trades you should be able to execute trades with same number of pips / risk:reward in dollar amount remains consistent for each trade.

2. You have a method that has an edge, no matter how small, but your method has an edge. By edge I mean, it is most probable that your winners will be more than your losers (that is, more than 50% probability of a favorable outcome with at least equal risk/reward)

3. "It will turn around" doesn't mean market will reverse the direction. It means your edge will start working after a long streak of negative outcomes. Sometimes it may take several months to get back money lost in such streaks. For example, if you experience 52 consecutive losses, with 60% winning rate, you may need to execute 260 more trades just to break even 52/(60-40 = 20)*100 = 260, add few more for interest and spread.

4. Forget it if your risk is higher than reward.
The Thief of Wall Street
  • #17
  • Oct 11, 2014 8:24pm Oct 11, 2014 8:24pm
if you are in a position to ask here then I can assume that you lost your confident to yourself and/or system.
to do list:
1 - stop LIVE trading
2 - strat DEMO trading ( change nothing )
3 - get back your confident
4 - resume Live trading

GL
My Best Trade is Next Trade!
  • #18
  • Oct 11, 2014 8:33pm Oct 11, 2014 8:33pm
phase 2
if #2 fails, then you should change strategy/system traded & should find the one fits you. until then no live trading, or you become the liquidity provider for winners

GL

Quoting MAM.Trader
if you are in a position to ask here then I can assume that you lost your confident to yourself and/or system. to do list: 1 - stop LIVE trading 2 - strat DEMO trading ( change nothing ) 3 - get back your confident 4 - resume Live trading GL
My Best Trade is Next Trade!
  • #19
  • Oct 11, 2014 8:51pm Oct 11, 2014 8:51pm
Quoting Custos
{quote} it's losing not loosing
Don't tell him http://www.forexfactory.com/boredtoloose
The Thief of Wall Street
  • #20
  • Oct 11, 2014 8:54pm Oct 11, 2014 8:54pm

Quoting Chicky
{quote} Don't tell him http://www.forexfactory.com/boredtoloose
My Best Trade is Next Trade!
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