We all have those awful trading days where the market takes an unexpected turn and before we know it we are taking a day off after having a big loser. The markets can be a very unforgiving place and the emotional impact of having a big loser in trading can some times be devastating.
How do you deal with big losers in the markets?
Here’s what some of Positive Equity’s traders have to say about it.
I usually take the rest of the day off and have a lie in the next day. If it’s not an end of day trade, I get out of the office, try to do something productive that I need to do and come back in hours later when the affect has eased.
Recently, after a big retracement and a horrible loss. I took a break and had some hot chocolate (always feel better with hot chocolate). I found a homeless guy and gave him all the money I had I my pockets. Stood in the rain for 10-15 seconds and then came back into the office. Set a small trading goal hit and left for the day before coming back for the close in a different frame of mind.
I watch Tom and Jerry or some cartoon of yesteryear. Helps me detach myself from trading after a good or a bad day.
Once I lost significant sum in a single day, was the best loss I could take that day, I was happy.
I try to analyze what I could have done better. After that, I go on a break and don`t think about the market.
I had huge loser after bad Greek news. I realized that I traded with big size and took a risky trade at the wrong time. It had a big impact on my confidence but as time is passing by I’m gaining it back.
I usually feel very angry but try my best to cover it up – as for the rest of the world, nobody really cares about our winners or losers! I get some exercise always after a big loser to clear the head – gym, a run, or golf.
I remember my two biggest losers well. One was a sloppy trade I put on, having the previous day had my biggest day ever. I thought I was invincible – I was wrong! I shrugged it off as a costly lesson learned. The second loser was due to an automated program I had designed – it was an instant massive loser on the market open. It was hard to take but I accepted that when it came to automation, there were guys out there light years ahead of me. That was the beginning of the end of that type of trading for me.
I curse like a sailor for a set amount of time to get the anger out of the system, then move on to the next trade.
Big losers never bother me too much. Poor execution and not sticking to your plan are the real killer. Long walks and turning off screens are par for the course.
You mentally prepare for big losers before they happen so when they happen it’s all part of the game and not a surprise.
I get out of the office and go for a drive in my car. When I come back, I look at the trade, learn what I need to about the markets and myself, figure out what went wrong, then write a big note that I stick on my desk. I also write notes in my journal to review later that week, month, year, to make sure I m not repeating the same mistake. If the mistakes appear again, my post-it gets bigger and more prominent on my desk, until it’s on my keyboard staring at me at every key stroke and mouse click. If I still repeat it, I put the post-it on my mouse overnight and visit it in the morning. Every time I step away, I put it back on the mouse. Every once in a while I take a day off. In my trading career I have taken weeks off after trading terribly. And once I took a month off, went to another office and trained trainees for a month as penance and self-flagellation.