Three Losses in a Row | Forex Factory

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Three Losses in a Row

  • #1
  • First Post: Aug 24, 2006 12:14pm Aug 24, 2006 12:14pm
I lost three times in a row. I lost a total of 42 pips (2+6+34) in the last two days. I don't know what went wrong but I lost about 9% of my margin in about 48 hours.

Since I opened my latest live account about 45 days ago this is the first time that I encounter such a problem (I'm up 151 pips in total since then).

I fear to approach the market. On the other hand I want to compensate what I lost. This mixed emotion is a killer and I don't know how to deal with it.

Any ideas that could possibly help me to overcome my fear and make a wise decision?
  • #2
  • Aug 24, 2006 12:19pm Aug 24, 2006 12:19pm
Quoting aparsai
I lost three times in a row. I lost a total of 42 pips (2+6+34) in the last two days. I don't know what went wrong but I lost about 9% of my margin in about 48 hours.

Since I opened my latest live account about 45 days ago this is the first time that I encounter such a problem (I'm up 151 pips in total since then).

I fear to approach the market. On the other hand I want to compensate what I lost. This mixed emotion is a killer and I don't know how to deal with it.

Any ideas that could possibly help me to overcome my fear and make a wise decision?
Time...and a good woman...usually helps.

Honestly, my friend...you need to closely monitor your neuro-associations. Be careful not to approach the market with fear, or you'll self-realize. So...when you feel the fear coming on, interrupt your pattern (I dunno, think of daisies - daisy dukes works better for me).

point is, it's good that you come to the realization now. First take a break (1 day...go play golf, whatever), then come back and attack the problem. Don't think about what you need to do, think about what you're going to do (make a good trade). Then, when you feel the fear set in, tell yourself that there are worse things in life (like being dead or sick) and then think of something happy...associate happiness to trading and you'll forget your fear ever existed.
  • #3
  • Aug 24, 2006 12:22pm Aug 24, 2006 12:22pm
Quoting aparsai
I lost three times in a row. I lost a total of 42 pips (2+6+34) in the last two days. I don't know what went wrong but I lost about 9% of my margin in about 48 hours.

Since I opened my latest live account about 45 days ago this is the first time that I encounter such a problem (I'm up 151 pips in total since then).

I fear to approach the market. On the other hand I want to compensate what I lost. This mixed emotion is a killer and I don't know how to deal with it.

Any ideas that could possibly help me to overcome my fear and make a wise decision?
That is too sad.
But what makes a man brave is that he faces such jolts with honour and has reilience.
Just before placing any entry once you decide where you are going to place it, share with some friend and take a second advice.
It may help.

kolachi
  • #4
  • Aug 24, 2006 12:29pm Aug 24, 2006 12:29pm
If you have a reliable system and you have done your backtesting then you would likely find out that 3 consecutive losses are very acceptable and completely within the accepted distribution of wins and losses.

If you are troubled by 3 losses then run away from any type of trading as fast as possible.
  • #5
  • Aug 24, 2006 12:46pm Aug 24, 2006 12:46pm
Quoting mrmikal
Time...and a good woman...usually helps.

Honestly, my friend...you need to closely monitor your neuro-associations. Be careful not to approach the market with fear, or you'll self-realize. So...when you feel the fear coming on, interrupt your pattern (I dunno, think of daisies - daisy dukes works better for me).

point is, it's good that you come to the realization now. First take a break (1 day...go play golf, whatever), then come back and attack the problem. Don't think about what you need to do, think about what you're going to do (make a good trade). Then, when you feel the fear set in, tell yourself that there are worse things in life (like being dead or sick) and then think of something happy...associate happiness to trading and you'll forget your fear ever existed.
Good points MrMikel. I'll stick with them. I probably won't open my platform till Sunday evening and try to enjoy life with my wife and kids. I'll also read some articles on psychology of trade and dscipline to refresh my mind.

I'm quite sure that the system I'm currently using is working well I just need to pay attention to other issues.
  • #6
  • Aug 24, 2006 12:48pm Aug 24, 2006 12:48pm
Quoting kolachi
That is too sad.
But what makes a man brave is that he faces such jolts with honour and has reilience.
Just before placing any entry once you decide where you are going to place it, share with some friend and take a second advice.
It may help.
kolachi
Unfortunatly I'm a lone trader and have nobody to immediately be in touch with. However, I keep refering to our forum and seek for advice from good buddies like you. Thanks.
  • #7
  • Aug 24, 2006 12:51pm Aug 24, 2006 12:51pm
Quoting philmcgrew
If you have a reliable system and you have done your backtesting then you would likely find out that 3 consecutive losses are very acceptable and completely within the accepted distribution of wins and losses.
If you are troubled by 3 losses then run away from any type of trading as fast as possible.
The problem is not with my system. The problem is that within the last 3 trades I didn't exactly follow the rules of the system that I'm currently using. I won't give up with 3 losses in a row, not even 10 losses in a row, but I have to find methods to avoid them (I mean through money management, etc.)
  • #8
  • Aug 24, 2006 12:58pm Aug 24, 2006 12:58pm
Quoting aparsai
The problem is not with my system. The problem is that within the last 3 trades I didn't exactly follow the rules of the system that I'm currently using. I won't give up with 3 losses in a row, not even 10 losses in a row, but I have to find methods to avoid them (I mean through money management, etc.)
If you have lost 9% of your account on 3 trades totaling 42 pips then I would suggest that you do have some problems with your system. Money managemnet has nothing to do with your win:loss ratio. It answers the question "how much" when deciding your trade size. I would take a look at that when doing your evauation. I'm not trying to be mean here, but 9% is a pretty good chunk of your account.
  • #9
  • Aug 24, 2006 1:07pm Aug 24, 2006 1:07pm
Quoting philmcgrew
If you have lost 9% of your account on 3 trades totaling 42 pips then I would suggest that you do have some problems with your system. Money managemnet has nothing to do with your win:loss ratio. It answers the question "how much" when deciding your trade size. I would take a look at that when doing your evauation. I'm not trying to be mean here, but 9% is a pretty good chunk of your account.
Okay, I usually (when sticking with my system not the last trade I made) risk 2% of my account and usually trade in a way that the winning trade gains 30 pips and the loser losses 10 pips.

Ten pips is roughly equivalent to 2% of my account. In most cases I enter and exit a trade in a few minutes. I also move my S/L to B/E +1 or 2 pips as soon as I get a chance to avoid losses. That's why so far 68% of my trades have been winners but some ended up with only 1 or 2 pips profit. I hope this can help.
  • #10
  • Aug 24, 2006 1:11pm Aug 24, 2006 1:11pm
Taking a loss is probably the hardest thing in trading. That is when the emotions go nuts. I remember my first loss. I went into denial and kept moving my stop farther and farther back, becasue I knew it would turn around. 120 pips later Iwas convinced it was not going back the way I wanted it to go. That night I could not sleep. I was so mad. The next day I went straight away and started to trade I was going to make up that loss no matter what ( another mistake) That is called trading with emotions. I took big risk. It started to pay off. But the enibitable happened. I started to take on losses again, but I kept trading determined to make them up. I blow 2/3 of my account, Ouch but what a lesson. I now, well atleast try to stick to my plan. I never move a stop. I never go in a trade to make up a loss. I trade a plan and I plan my trades. Do I take losses yes but my goal is to learn from each loss and get better with each trade. I also have wins. I am now slowly building my account back up, I am not working to make up my losses just working to make a profitable trade.

Emotion suck when trading
Fdisk Please I just want a few pips. Is that too much to ask?
  • #11
  • Aug 24, 2006 1:16pm Aug 24, 2006 1:16pm
Quoting fdisk
Taking a loss is probably the hardest thing in trading. That is when the emotions go nuts. I remember my first loss. I went into denial and kept moving my stop farther and farther back, becasue I knew it would turn around. 120 pips later Iwas convinced it was not going back the way I wanted it to go. That night I could not sleep. I was so mad. The next day I went straight away and started to trade I was going to make up that loss no matter what ( another mistake) That is called trading with emotions. I took big risk. It started to pay off. But the enibitable happened. I started to take on losses again, but I kept trading determined to make them up. I blow 2/3 of my account, Ouch but what a lesson. I now, well atleast try to stick to my plan. I never move a stop. I never go in a trade to make up a loss. I trade a plan and I plan my trades. Do I take losses yes but my goal is to learn from each loss and get better with each trade. I also have wins. I am now slowly building my account back up, I am not working to make up my losses just working to make a profitable trade.

Emotion suck when trading
Good points. You just reminded me of my first live account. I blew up more than 75% of my account and then I realized that I need to back up and learn learn learn. But apparently there is no end to this learning curve.
  • #12
  • Aug 24, 2006 1:24pm Aug 24, 2006 1:24pm
I can really relate to what everyone is saying here. Thanks for sharing. One of the hardest things that I have found with trading, is to look at the losses in a positive way. Yes, I know, it sounds a little implausible! But actually, when you are winning, you are probably not learning half as much about how this whole thing works, as when you take to odd tumble. Wake up calls are great teachers. That's when we have to examine ourselves and really get back on track. that's a large part of developing as traders - and as people.

During my time trading, I have taken whole months off to make sure that I am in the right place before I go back into it. I have to ask myself, 'why be in a hurry to blow the account? What's the rush?', while my mind is saying - you've got to do better, work harder, blah, blah blah..... But it's better to get back to it in the right mindset, so you can carry on building.

The framework is there; we just have to work on our frame of mind.
  • #13
  • Aug 24, 2006 1:24pm Aug 24, 2006 1:24pm
I have had some losses this week as well because of the crazy nature of the market this week. Yesterday the EUR/USD broke through its lower trendline, but then came right back up almost to where it had started. Today it came down again, but it's above yesterday's lows. But the pound yesterday broke above its short term down trendline, but it was a false breakout.

The trick is really money management. You aren't going to get them all right, so you want to lose as little as possible.

Although I have had losses this week, I am still up considerably for the month, so I am happy.
  • #14
  • Aug 24, 2006 1:34pm Aug 24, 2006 1:34pm
Thanks. I feel that I'm filled with energy. It is great to have so many wise e-friends here.



Quoting niceguy777
I can really relate to what everyone is saying here. Thanks for sharing. One of the hardest things that I have found with trading, is to look at the losses in a positive way. Yes, I know, it sounds a little implausible! But actually, when you are winning, you are probably not learning half as much about how this whole thing works, as when you take to odd tumble. Wake up calls are great teachers. That's when we have to examine ourselves and really get back on track. that's a large part of developing as traders - and as people.

During my time trading, I have taken whole months off to make sure that I am in the right place before I go back into it. I have to ask myself, 'why be in a hurry to blow the account? What's the rush?', while my mind is saying - you've got to do better, work harder, blah, blah blah..... But it's better to get back to it in the right mindset, so you can carry on building.

  • #15
  • Aug 24, 2006 2:51pm Aug 24, 2006 2:51pm
I absolutely agree that money management is very key, at least for me it is. Since I don't have a crystal ball and can't control the market, the next best thing to do is keep in tightest control on what I can, and that's my money. So while I don't think I'm that good of a trader yet, I do make consistent gains. I do a lot of math with and thinking on risk reward analysis and currency trading ranges. I like to set reasonable but meaningful targets so that I don't assume too much risk while making enough to sustain motivation. I know this is probably against many veteran's advice, but I don't quite agree with opening very small accounts with high leverage to begin with.

Another thing I think is important for me is developing a genuine interest in the trading business so that it doesn't become a burden. I came across forex during my personal leave from work and was absolutely fascinated by this market structure. I've spent a lot time reading useful stuff (thanks FF!), examining and disintegrating indicators, learning MQL, programming, etc., and I can say that I really enjoy doing it.
  • #16
  • Aug 24, 2006 3:32pm Aug 24, 2006 3:32pm
Quoting aparsai
The problem is not with my system. The problem is that within the last 3 trades I didn't exactly follow the rules of the system that I'm currently using. I won't give up with 3 losses in a row, not even 10 losses in a row, but I have to find methods to avoid them (I mean through money management, etc.)
You can be the best in the world at money management, but, if you don't follow your rules day in and day out nothing is going to save you.
Follow your rules every trade, remember the market follows no logic, accept your losses as part of your business expenses, and don't look for revenge.
(1) If the market has taken money from you because you didn't follow your rules it's not the market's fault.
(2) If the market has taken money from you when you did follow your rules it's not the markets fault.
The difference is, with (1) you've only ourself to blame.
Go back and trade precisely by your rules, and then there will be no emotion in your trading.
Peter
  • #17
  • Aug 24, 2006 3:51pm Aug 24, 2006 3:51pm
don't worrie, 3 losses is nothin and your loss sizes are very small.

Your either starting too small of an account, or over leveraging it too. But a 9% draw down is nothing either. If your panicing on a 9% draw down your gonna have a heart attack when you hit a 50% draw down.

I suggest you get back on a demo and get used to trading your system, and get used to taking losses and do it enough to be confident that the next winning streak is just around the corner.

Befor you trade forex you must prove to yourself your system works on a demo, and realize what the max draw down is of this system. Trade the demo with the same $ ammount you plan to trade live. If you tend to experiance 50% or more draw down then rethink your method. If your breaking your methods rules will be a big factor too. Are you adhearing to the rules like you should? And rething your money management system.

Get to where you can grow a demo like its nothing. And once you can do this consistantly you'll still struggle in real trades at first because the feel is different. emotionaly.

If you cann't or haven't doubled or trippled a demo a few times then your definatly not ready.

Dave
  • #18
  • Aug 24, 2006 3:52pm Aug 24, 2006 3:52pm
If you are losing because you made mistakes, then you need to think about how hard it is to actually trade emotion-free and make those losses back, and then you won't deviate from your plan anymore.

The turning point for me was when I lost 20% of my account on an interest rate news event. Since then, I rarely make mistakes, because all I can think about is how hard it is to make that money back and how much I want to preserve my capital.

You have to want it so much that you'd do anything to reach your goals.

I want to be a professional trader working for myself within two years. I am doing whatever it takes to reach that goal, and I fully believe, without a shadow of a doubt, I'll make it.
Mr. Trend
  • #19
  • Aug 24, 2006 4:32pm Aug 24, 2006 4:32pm
I've lost 60% this week, after making 96 pips last week. I didn't loose that much money, as I'm trading a mini account. The problem with starting a mini account with say 300 dollars is you can't practice proper money management. But I'm still in the game after 2 months live and I'm still learing from my mistakes.. My loses this week were from greed, not sticking to my own rules period, so I have to learn to control that part of the beast that resides in me. This is the third time I've drawn down 50% or more of my account. I will take a break, and go over my successful trades, then identify my mistakes, and approach the market again with the same conservative approach that I did when I was winning my trades. So take a small break, and try, try again.

Good luck!
  • #20
  • Aug 24, 2006 4:53pm Aug 24, 2006 4:53pm
Quoting conasounga
I've lost 60% this week, after making 96 pips last week. I didn't loose that much money, as I'm trading a mini account. The problem with starting a mini account with say 300 dollars is you can't practice proper money management. But I'm still in the game after 2 months live and I'm still learing from my mistakes.. My loses this week were from greed, not sticking to my own rules period, so I have to learn to control that part of the beast that resides in me. This is the third time I've drawn down 50% or more of my account. I will take a break, and go over my successful trades, then identify my mistakes, and approach the market again with the same conservative approach that I did when I was winning my trades. So take a small break, and try, try again.

Good luck!
You can easily learn proper money management with only $300. The key is finding a broker who trades micro-mini lots (0.10 a pip). Then we're talking the equivalent of having $3,000 in a mini account or $30,000 in a standard account.

I always recommend that people starting with small amounts need to learn proper money management from the get go. Of course we want to grow our accounts as fast as possible, but trust me if you start out with TOO LOW of an account and just decide to over leverage or over extend yourself, you will just say "no big deal, it's only $300" and gamble away. Some of you will double your accounts, and others will blow them out on a single trade...but neither of those camps will have learned a thing. Double that account using the proper < 2% risk rule and then start increasing your risk factor. Trust me, you'll find that over time you'll have learned a great deal more trying to turn $300 into $600 at 10 cents a pip than you would had you gambled $1 a pip.
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