The generally rule is, if you are having a bad day and keep getting loses its best to take a break and come back tomorrow to trade. Because this is the spiral that leads to most traders who end up losing all their capital. In Poker they call it going on Tilt. It means that you don't make rash decision anymore and the trades you are taking are making no sense pretty much.
You can easily see this in the markets. Say the market is going up, most retail people enter. Then all of a sudden there is a huge crash. Most of the people get liquidated or stops get hit, and then there is usually some huge move back up. And thats when the retail people get liquidated again who went short. It happens alot in crypto and its very bad to get caught in those moves.
Topic: How many consecutive looses can you handle in trading? - page 8. (Read 830 times)
Mid-long term trader/investor here. 4 consecutive bad picks would probably be where I start to doubt myself but would probably think that it's just "bad luck", and 5-6 consecutive bad picks would probably be where I start to deeply re-think my lifeinvesting strategies.
^Thankfully the last time I've had that bad of a track record was in 2017-2018.
^Thankfully the last time I've had that bad of a track record was in 2017-2018.
It is popular opinion sometimes that a trading strategy might no longer be effective if one begins to loose money while trading instead of gaining.
An important question i ask myself whenever i hear about people complaining or simply discussing a series of consecutive looses they have made while trading using a certain strategy is;
HOW MANY CONSECUTIVE LOOSES IN TRADING CAN YOU HANDLE BEFORE YOU ACCEPT THAT YOUR CURRENT TRADING STRATEGY IS BECOMING LESS EFFECTIVE?
An important question i ask myself whenever i hear about people complaining or simply discussing a series of consecutive looses they have made while trading using a certain strategy is;
HOW MANY CONSECUTIVE LOOSES IN TRADING CAN YOU HANDLE BEFORE YOU ACCEPT THAT YOUR CURRENT TRADING STRATEGY IS BECOMING LESS EFFECTIVE?
Probably in the range of 5 or more tries. Then I switch trading strategies, but I go and see what went wrong with the previous losses, and try to found out what could I have done to avoid those losses and not to commit it again.
And it just shows that there are no perfect strategy, sometimes you get lucky with bad trading strategies, but most likely it will lead to such losses in the future.
HOW MANY CONSECUTIVE LOOSES IN TRADING CAN YOU HANDLE BEFORE YOU ACCEPT THAT YOUR CURRENT TRADING STRATEGY IS BECOMING LESS EFFECTIVE?
- Use small capital of yours to trade, like GreatArkansas said. I'd prefer to use 10% to 20% of my capital for trading.
- You have to self-limit total trades daily and if you break that limit, it is reasonable if your bad trading rate increases.
- The market has important movement or decisive days. It is when you should not trade. So if you ignore risks, and continue your trading in such days, higher bad trading rates are expected
- My threshold: 6 trades daily with one coin, if I find any to trade. If I lose 2 trades, I stop trading in that coin.
The market today truly had changed because we now see how much the inflows and outflows to and out of the exchanges and sometimes the strategies that use to work doesn't anymore. The indicators show something yet the market acts differently and that is why you as a trader will somehow think the market is rigged. Well, you're not the only one who thought of that. The only strategy that works well in crypto is long-term investment.
(....)
HOW MANY CONSECUTIVE LOOSES IN TRADING CAN YOU HANDLE BEFORE YOU ACCEPT THAT YOUR CURRENT TRADING STRATEGY IS BECOMING LESS EFFECTIVE?
Hmmm, I am not really basing on consecutive losses since sometimes my risk: reward ratio for each trade I do is different. HOW MANY CONSECUTIVE LOOSES IN TRADING CAN YOU HANDLE BEFORE YOU ACCEPT THAT YOUR CURRENT TRADING STRATEGY IS BECOMING LESS EFFECTIVE?
But if ever all same risk: reward ratio and trade size, more than 10 consecutive losses will become less effective, since I have a small position size for every trade I do.
That's why capital preservation is extremely important when we do trading.
HOW MANY CONSECUTIVE LOOSES IN TRADING CAN YOU HANDLE BEFORE YOU ACCEPT THAT YOUR CURRENT TRADING STRATEGY IS BECOMING LESS EFFECTIVE?
3 straight losses were the max for me to think about I'd stop using this strategy or to take some rest.
There are so many factors such as my win rate before I started making consecutive losses or how tight my stop losses are. Tighter stop losses means my account won't take a huge hit whenever I make a wrong call, so I can make as many consecutive losses as possible minus getting concerned. Maybe 6-7 consecutive losses if my previous win rate was above 60% with the same strategy
It could be 2-3, there's no reason you if exceed on that range since you already know that you have already a failure within consecutive losses, in the first failure it serves warning should learn mistakes, second, trying to correct your mistake and in the third times, that is too much just leave it and find another one. It's really hard to predict and make your own strategy, trial and error don't seem to work either.
There are too many strategies to try, but all of these didn't have any guarantee that you will succeed in trading. Plus another factor is, there's no real strategy that gives assurance of gaining profit, all of them will remain predicting the market.
and to make the situation more complicated, the trading strategy deviates from one coin to another. the strategy that you used before may not be applicable to a new token in the market. so for me, you can't really tell how many losses you can handle especially if you are talking about different alts. but each loss should give you specific lesson in trading. it may not be applicable to your next trading activity but you can always apply it when the situation calls for.
for sure, most of us have had so many losses in crypto trading already and yet we are still here, trading in crypto market. each situation will give us more insight on how to handle our funds better. we should not stop trying as it means giving up in this market.
HOW MANY CONSECUTIVE LOOSES IN TRADING CAN YOU HANDLE BEFORE YOU ACCEPT THAT YOUR CURRENT TRADING STRATEGY IS BECOMING LESS EFFECTIVE?
It could be 2-3, there's no reason you if exceed on that range since you already know that you have already a failure within consecutive losses, in the first failure it serves warning should learn mistakes, second, trying to correct your mistake and in the third times, that is too much just leave it and find another one. It's really hard to predict and make your own strategy, trial and error don't seem to work either. There are too many strategies to try, but all of these didn't have any guarantee that you will succeed in trading. Plus another factor is, there's no real strategy that gives assurance of gaining profit, all of them will remain predicting the market.
With me it can take anywhere between 2-4 but I do mainly long-timeframe trades. Essentially anything I think isn't a breakout from too much of a rise in volume or too little resistence, I normally assume it's me that's wrong.
It is popular opinion sometimes that a trading strategy might no longer be effective if one begins to loose money while trading instead of gaining.
An important question i ask myself whenever i hear about people complaining or simply discussing a series of consecutive looses they have made while trading using a certain strategy is;
HOW MANY CONSECUTIVE LOOSES IN TRADING CAN YOU HANDLE BEFORE YOU ACCEPT THAT YOUR CURRENT TRADING STRATEGY IS BECOMING LESS EFFECTIVE?
An important question i ask myself whenever i hear about people complaining or simply discussing a series of consecutive looses they have made while trading using a certain strategy is;
HOW MANY CONSECUTIVE LOOSES IN TRADING CAN YOU HANDLE BEFORE YOU ACCEPT THAT YOUR CURRENT TRADING STRATEGY IS BECOMING LESS EFFECTIVE?
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