How To Deal With Drawdowns in Trading
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- Опубліковано 1 жов 2024
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Have you been struggling with drawdowns in your trading recently and feeling like it's affecting you mentally? In this video, I share my experiences helping traders overcome drawdowns and get back to peak performance. The key is to take action now before the negative spiral gets worse and leads to long-term effects. Whether you're a new trader still learning the ropes or a more experienced trader who should know better, this video will give you practical tips to strengthen your trading psychology and turn things around.,
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#Trading #Drawdown
I went through a similar drawdown where I lost 60% of my account. It took me about 3 months to come back.
i needed to take a break from trading all together, which wasnt so difficult as I lost all interest anyhow, then slowly re-enter
the trading environment. It is a type of PTSD. Its bad, and something I won't ever forget!
However, on a positive note, because I didnt quit it has made me a much better trader now in many ways.
That's it! Every trader has a painful experience (or many) at some point in their development. It's how you use those experiences and grow through them that matters most. Well done for persevering.
~ Nicholas
@@Duomoinitiative Same happend to me , i was stressed out for nothing just to make it things work and i got a big loss one day the tention and the stress i felt in my body is so much it even created muscle knots in my body , thank you really you just helped me understand this ptsd thing , it made me even avoid looking at the charts some times
I can’t even bring myself to click “buy” at this point.
My issue may be systemically that I'm a LiverpoolFC fan. So that means I believe in miracles... Man!!! I'm so in trouble with my trading.
bro you are so phucked....lol
You're not talking about drawdowns, you're talking about losses. Drawdown = floating negative PnL.
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I've missed this kind of videos. Really nice one! 😉 keep them coming😉
x2
when in a drawdown, simply invert you chart and indicators. Voila! 😛
The moment you open a trade you're already in DD.
What u said is really true. Thanks for the video
Very good advice.. I'm currently going through that process.. Thanks very much 💪🏾💯🙏🏾
I’ve seen cue banks in a 300 thousand draw done , and I’m sure he’s a better trader than you .. draw done is inevitable, learn how to cut losses
Phenomenal advice, thank you for these “how to” golden nuggets!
Profound and prophetic in my life own trading, thank you Nic.
Thanks, very useful. Will try this
Look we like when you talk a lot, please talk more. Thank you.
😂 thanks Sebastian!
~ Nicholas
My account has been going down, as I trade BTC inverse perpetual (meaning my account is in BTC, not in USD) and Bitcoin has been going down for a while now. I made around a 15% profit last month in BTC value though, so I know that it isn't my trading abilities that are at fault here:)
Has the loosing streak stopped?
Your advice has improve my trading skills, thank you very much for sharing all this knowledge! Please keep on going!
I needed to hear this, i got reckless with my challenge account for a prop firm and now im 4% down, my mistake was feeling like i know every next move coz i had a good run in Dec, so i over leveraged and took a nasty hit, rather than scaling down to recover over time, i kept lot size heavy . Good thing i kept max daily loss in check, anyway i had a good trade today and have started slow recovery at least to get a retake.
It's a good lesson you learned though. I'll be putting out a video explaining my approach once the challenges are done.
~ Nicholas
I'm 4% down on funded 😭
Thanks for the video!!!
Real solid drawdown vid 💯
You are the best! Thank you!!
Plan.
#Great Lesson
First. 😆 Happy New Year Nicholas. Thanks always for the lessons and great content. 👍
Thanks Melu, happy new year to you too!
~ Nicholas
insightful, thanks
Nice video 👌🏽
Thank you for sharing. I really didn't understand why I needed to backtest or the benefits of trading simulation. It's so vital for anyone who wants to trade profitably. Also, it's so important to understand stop losses and where to place them. P.S. You didn't talk too much.
💥🇿🇲💥
Hay Nic it touch so many hearts of trader i believe this video added value than any other abcd trading course please do more casual talk like this thank you so much 🤗
Thanks Saifullah!
~ Nicholas
Thanks bud. Cheers
Great vid
THANKS for this video, I am happening for the same situation and it is a month failing, after 3 years of consistent trading, I am getting frustrated, today I even think to stop for a week or maybe longer, but feel kind of disappointed
1. Get back to the drawing board and learn how to trade.
2. Evaluate your performance and makes changes where necessary.
3. Use a simulator to practice and put in effort on the charts. Go over the basics. Review your strategy. Make things instinctive, not impulsive.
4. Use a simulator/demo account to practice getting out of a drawdown with the same restrictions on your live or funded account.
5. Practice being in a worse drawdown several times, make it much more difficult. That way, you will have experience in getting out of drawdown much worse than you will normally face.
You still Hitting the gym??
Always!
~ Nicholas
great content as always!
Really enjoyed this video! I think my drawdown is to do with over sizing and revenge/overtrading after the oversized loss.
Would the bar by bar replay be helpful you think to train like you were saying?
The best video I’ve seen on drawdown! Peace ✌🏿
Rare to find guys like you. Appreciate the honesty mate and your time making these videos. Needed this today
No matter how good you are you will have a loss due to either making a poor decison because you can not always trust your brain on its own or the move you were betting on was manipulated. Trust the system not yourself. Your brain processes change when faced with base desires or threats. It is important to recognize your faults so that you can plan for them. Ive found meditation and zen practice to be very helpful in confronting greed and impatience. Leading to increased brain performance.
Good advice Andre!
~ Nicholas
This is such great advice. Thank you!
the sweating and shaking sindrome....i ve had it, your vision gets blurred and is hard to get over it. But i kept going
Nice one! And now you're the ScalpMaster!
~ Nicholas
Seems like you have lots of experience with dealing with Drawdowns
I do, all traders will.
~ Nicholas
How much of daily lifestyle habits affect our trading?
A huge amount!
~ Nicholas
What is your thought on using a strategy but switching timeframes to best suit market condition? Example I have rules I follow on 15 min time but what if the strong setup occurs on 5 Min. Can I take those?
It depends on your strategy. Test it extensively first and see how it works out, better to be over-prepared rather than under.
~ Nicholas
@@Duomoinitiative appreciate it man. Love your channel.
Hey Nick. I’m a consistent trader…at losing. I’ve been learning the basics for a year or two. Took a few trades early on that were based on luck. Past two months I’ve been taking trades every week. I didn’t put a lot of money because I want to learn and figure out a system that works for me. My problem is/was taking blind trades. I cant stare at my phone all day unless I want to get fired. So currently I’m figuring out a strategy that can work for me around my work. That means swing trading or something like that that doesn’t require me looking at my phone all day. I watched your video about a guy in 1950-60’s how he made 2million and how he worked around his dance career. That’s something that I’m trying to figure out.
My issue are chasing. I often chase tickers up .70 to 1.00 a share. I try to buy the dips more. I have been live for three years, have lost a lot, $6,500. I was using leverage with a small account, had a few big losses of 1k to 1,500. And learned a lot. I paper traded for a long period of time. I recently had a small account, 488, have lost $177 this month, 63% of my account. I decided to take my money out. Going to take some time off, save up more. And maybe trade in sim again.
I think that's a good idea. Try to isolate the problems you encountered and go over them again and again until you consistently overcome them. Just like you would with any other skill if you wanted to improve.
~ Nicholas
@@Duomoinitiative Thanks. A break has been good so far.
I have to deal with the losing streak in my FTMO challenges. All the things you say happens to me. Cutting losses was good but I have cut my profit with partials also, just because being not confident after those many losses. And my summary was -3% right now and 9 days left before challenge is over.
But man I love you for taking Kobe or Steph and Floyd in the video and compare it 💪🏼
Surely if you are using proper money management and automating your thoroughly tested strategy, this should not be a problem. Is it not possible to automate your strategy, Nicholas, so that you can rely on your tested rules rather than watch the account balance fluctuate? And even if it does blow up, it should only wipe out a fraction of your account, not 500K/4M like happened to your pal, unbelievable...by my rules he should have only lost a maximum of 0.05 * 4M in that bad trade (5% per trade max). If he had many bad trades in a row, he would have had to have had 19 losing trades in a row to get down to 500K from 4M. My backtest tells me stats for the worst case scenario for consecutive losing trades, and if 19 trades was conceivable, i would find a different strategy i think.
Even if you automate your trading you’ll still experience some losses and therefore drawdown. But if it’s automated you don’t risk the negative spiral as a result of mental issues.
~ Nicholas
He says in the video the guy from Dubai may have been a victim of a flash crash. There's not much you can do when you can't sell your position, even if you don't hold all your trading funds with the broker, you could end up owing the broker money in this type of situation. Sort of like the Swiss franc flash crash back in 2015.
@@buttmonkey1 A few months ago I checked with two brokers and they told me my maximum loss is my account size. They will close your trade out before letting you go into debt. These are European regulations. I only stake maximum 2.5% of my account balance on one trade, by using a stoploss. I know i dont have 0 risk of a huge loss, but i have tried to manage the risk down. I guess in a flash crash you would only be safe if you had a guaranteed stop loss.
Well all I learned from that is to withdraw your money regularly. If I have 4 million dollars I think I can do ok trading with 1 million.
Yeah man I had just this, I hit drawdown, then lowered my confidence so took myself out of a fantastic winning trade , it's tough to overcome
Unstructured ... but brilliant. Thanks. By the way, one additional method might work, and that's keeping a small real account, like $500 or so, and using that to train. With that you get the best of both worlds, that is you actually have real money on the line and at the same time it doesn't matter a whole lot if you lose some or all of it.
True. I agree.
Thanks M!
~ Nicholas
Currently down 64% YTD, last week I closed all the positions, started again with a clean account, working very well so far, looking to build back the confidence slowly, but surely
Have you spent time trying to isolate what the problem may be that led to that drawdown? My guess would be that the risk management may be a bit on the aggressive side.
~ Nicholas
@@Duomoinitiative Yes, I did, which allowed me to be green everyday this week :) My problem was the following, using too much leverage, averaging down on losers, holding onto losers for way too long, being greedy with winners and turning them to losers, doing trades without any stop or reasoning behind it (out of not finding a good opportunity to enter and being bored). So of course I didn't solve all those issues in one week, but I feel like I've made a good amount of progress :)
@@joelfavre4170 damn i am almost exactly like you! I trade options though. I went from 5k all the way down to 1.8k in 3 weeks! When i was at my highs I got greedy.
I respect you so much Nicholas! You’re a man of true values.
Thanks Sharif, really appreciate it!
~ Nicholas
Good one bro👍infact I am going through 1 now .
Good luck with it.
~ Nicholas
Thanks for keeping things in perspective Nicholas.
I get upset when I don't execute perfectly (on a profitable day no less).
For anyone reading this:
Step 1. Identify the problem. Review your trades. Are they a strategy problem (system)? or execution (you) problem?
2. Size down. Helps to take the edge off and focus on the process.
Good advice Jess!
~ Nicholas
Great video Nic, I truly enjoyed it
Thanks Bryan!
~ Nicholas
I have an issue with my trading. When i have a winning streak, it gets harder and harder to start trading the next day. I dont know it's fear or something else. After every winning days i think i overanalyse my self and find various issues: i'm to tired, i'm not emotionally stable enough, i have other things to care at the moment to not to trade. I think i'm somehow subconsciously got fear of a losing streak. How do I overcome this?
Firstly, taking breaks is essential. Trading leads to a cocktail of psychological and physiological changes in us and we need to recover (whether we realise it or not).
Next, you need to realise that trading is about taking profits and losses (as the old cliché goes, cutting your losses and letting your profitable trades run). Taking losses are inevitable and we can't build them up to be something we're afraid of. Winning and losing are two sides of the same coin in trading - what's important is that we've tested our approach enough to know that overall we are net profitable with all results considered.
~ Nicholas