OUCH! (Bad days)

[Synergy]

Sometimes luck just isn't on your side.

Dispite basically trading to my plan, my portfolio is down more than 10% for the week, and it's only Wednesday.

If the market had tanked, I might expect something like the following...

This is today alone:
-20%, -11, -9, -9, -7, -7, -7, -7, -6, -4, -1, 0, 0, 0, 0, +3, +9

Monday was not too different.

Because of this I'm in a bad mood. I know the whole next 1000 trades, stick to the plan etc etc but I still feel rather depressed. I should have been doing this long enough not to feel this way!

I think part of the problem is that things have been going along pretty smoothly, then in a couple of days the good work is undone.

If I had not followed my plan, or thought there was a problem with my plan, then I could learn a lesson. But I just feel like i've been dealt a bad hand...

Does anyone have any advice for staying up beat when things are not going well?

 

[professor_frink]

Sometimes luck just isn't on your side.

Dispite basically trading to my plan, my portfolio is down more than 10% for the week, and it's only Wednesday.

If the market had tanked, I might expect something like the following...

This is today alone:
-20%, -11, -9, -9, -7, -7, -7, -7, -6, -4, -1, 0, 0, 0, 0, +3, +9

Monday was not too different.

Because of this I'm in a bad mood. I know the whole next 1000 trades, stick to the plan etc etc but I still feel rather depressed. I should have been doing this long enough not to feel this way!

I think part of the problem is that things have been going along pretty smoothly, then in a couple of days the good work is undone.

If I had not followed my plan, or thought there was a problem with my plan, then I could learn a lesson. But I just feel like i've been dealt a bad hand...

Does anyone have any advice for staying up beat when things are not going well?

I don't think trying to be upbeat about losing money is the right reaction. I still crack the sh!ts if I have a bad week or month, I think it's a perfectly normal reaction.

However, I do find that breaking and throwing things around the backyard rather theraputic

 

[nunthewiser]

Bourbon and a lapdance works wonders

 

[breaker]

and fishing

 

[tech/a]

Happens.

Ive been trading a breakout portfolio of small resource stocks for around 7 weeks I actually picked the first candidates 3 weeks earlier set stops and opened the trades 2 days later off to FIJI
When I came back the portfolio was +6K so pretty happy.
2 weeks after I returned +1.8k Today it went to +10.8k and closed at +9.4k

If its fluctuating and not tanking then all is likely to be good.
if its tanking then look at weight in sectors.
Have you done any Montecarlo analysis on your plan this will add confidence if you have a 100% profitable result on say 20000 portfolio tests.

To flatten your curve you may also look at
Trade frequency --usually governed by position of stop and exit criteria if your method doesn't suffer from a lack of trades due to stringent entry criteria.
A trailing stop maybe appropriate at some point in the trades if your giving an unusual amount back say over 20% in a few days.
Are your trades liquid enough?
A time stop may help.
Do you have enough trades going to spread the fluctuations
I run 10-18.

Maybe something in there for you.
Also find that position sizing is very important on the psyche.
If a weeks fluctuations find you either taking your wife to the Masserati dealership (You drive a golf) or off to your shrink then you probably need to visit this aspect of your trading.

Hope there is something in that lot to help.
Dropped 12K in a day once--- it happens.
actually T/T when i traded a portfolio fluctuated 20-50K in a week I remember
mind you when you have massive equity its an easy/ier ride!!

 

[Trembling Hand]

Sometimes luck just isn't on your side.

Dispite basically trading to my plan, my portfolio is down more than 10% for the week, and it's only Wednesday.

This is today alone:
-20%, -11, -9, -9, -7, -7, -7, -7, -6, -4, -1, 0, 0, 0, 0, +3, +9

Monday was not too different.


I think part of the problem is that things have been going along pretty smoothly, then in a couple of days the good work is undone.

If I had not followed my plan, or thought there was a problem with my plan, then I could learn a lesson. But I just feel like i've been dealt a bad hand...

Just because you have stuck to the plan doesn't mean you have done the right thing. "Stick to the plan" is becoming the next great BS sprouted by the duds, spruikers and dreamers (not that I'm saying your are in this group)

- have a very good look at what your plan actually is. Have you given back capital or open profit in a week? Is your plan broken? Is your plan crap? ie all into the same stuff at the same time? etc etc. Do you need to do work around portfolio heat?

Does anyone have any advice for staying up beat when things are not going well?

If anything really worked there would be a lot more traders.

My suggestion is try

Bourbon and a lapdance works wonders

and fishing

However, I do find that breaking and throwing things around the backyard rather theraputic

all at the same time. You will soon be too confused and tired to be in a bad mood.

 

[Synergy]

All good advice. Except for Nuns. The bourbon almost ended up on my lap instead, but I thought it was worth asking...


Tech, Great points there. I have most of the list covered, but think I might look at increasing my number of holdings. my %'s list above contains a few that i entered and exited today - generally i only hold 10 - 12 and have found that to be ok previously.

Your position sizing comment is certainly true. I feel some of my positions are too large for the liquidity so I might look to scale them down where i feel it's appropriate. I've been thinking about this for a while but have avoided it because it'll mean using discretion - something i don't want to do.

TH, most of that given back was open profit, which i guess does make the situation a little better. The losses individually are not a problem, they just all happened at once.

A portfolio heat stop might be an option, but in this case i'm not sure it would have helped. In effect it would have gapped past my stop on open.

See what tomorrow brings...

 

[Synergy]

If its fluctuating and not tanking then all is likely to be good.
if its tanking then look at weight in sectors.

Materials: 62%
Energy: 38%

This is not something I've thought about previously but I think it might be hard to escape stats like that when trading the low end of the market. Unless I pick up a bio stock - touch wood.

 

[chiasm]

When I have a bad day I talk to my wife so I can at least de brief. It's the negative thinking that becomes constant which makes me feel depressed so I try to distract myself by doing something enjoyable. The low mood will only last until your next winning trade. All the best for tomorrow

 

[tech/a]

When I have a bad day I talk to my wife so I can at least de brief. It's the negative thinking that becomes constant which makes me feel depressed so I try to distract myself by doing something enjoyable. The low mood will only last until your next winning trade. All the best for tomorrow

If your nett trading figures are positive over time then swings regardless of their magnitude shouldn't be mood changers.
If your constantly losing then re read T/H's post.

 

[chiasm]

If your nett trading figures are positive over time then swings regardless of their magnitude shouldn't be mood changers.
If your constantly losing then re read T/H's post.

You are right as you have to have a low mood for for two weeks to meet the criteria for depression that would be a pretty bad run. I do think it is normal to feel down if you've had a few bad days and everyone should have some strategies to deal with it.

 

[Dowdy]

When you hear of another EU nation about to collapse (who is it this time? Portugal and Ireland) then it's usually a good time to stay out of the market, and the euro.

I think it's about time we have a correction. Metal prices are shooting up a bit too high too quick and same goes to everything else

 

[satanoperca]

Portfolio heat, little discussed, much misunderstood, determental to your state of mind. I speak from experience as this was what bought me undone the second time.

Oh, listen to jeckle and hide, Tech/A and TH.

Cheers

 

[skyQuake]

Learn to differentiate luck and skill, then you'll worry less.

Unlike financial markets, luck tends to revert to the mean (with clumping of course)

gl

 

[skc]

Synergy.. we all have bad days, weeks, months or years. If you don't show emotions to your wins / losses you won't derive enjoyment from your work and probably can't last long anyway.

I read somewhere that if you wake up 3 times a night worrying about your trades, you are trading too big. If you sleep soundly through the night, you are trading too small!

As a side note.

One of the biggest problem with conventional long only trading, is that a lot of the positions are more or less correlated. So the trader is always in a cornundrum... how many positions can I put on, esp when the market condition looks so good...without risking too much of capital/profit at the same time?

Too many positions and drawdown looks terrible. Too few positions and you may miss many potential good trades...

That's one of the main reasons that I prefer pairs trading as each position are very much uncorrelated.

 

[gav]

Tech, Great points there. I have most of the list covered, but think I might look at increasing my number of holdings. my %'s list above contains a few that i entered and exited today - generally i only hold 10 - 12 and have found that to be ok previously.

Your position sizing comment is certainly true. I feel some of my positions are too large for the liquidity so I might look to scale them down where i feel it's appropriate. I've been thinking about this for a while but have avoided it because it'll mean using discretion - something i don't want to do.

1. After reading the above, it sounds like you don't have a solid plan.
2. Do you know if your method has positive expectancy?
3. I suggest you read "The Universal Principles of Successful Trading" by Brent Penfold.

 

[Synergy]

1. After reading the above, it sounds like you don't have a solid plan.
2. Do you know if your method has positive expectancy?
3. I suggest you read "The Universal Principles of Successful Trading" by Brent Penfold.

Hi Gav,

Despite how it may seem, I do have a solid plan. I know the method has a positive expectancy, and it has shown this over the past 1.5 years (500 or so trades). My number of open positions varies with portfolio gains and partial fills.

The liquidity issue is one that is gradually becoming more of a problem as my portfolio increases. I knew this would be the case when i started, but now probably need to look into doing something about it. Increasing the number of holdings could be one solution, but a lower average trade result would probably go hand in hand with doing that.

One of the biggest problem with conventional long only trading, is that a lot of the positions are more or less correlated. So the trader is always in a cornundrum... how many positions can I put on, esp when the market condition looks so good...without risking too much of capital/profit at the same time?

Too many positions and drawdown looks terrible. Too few positions and you may miss many potential good trades...

With a positive expectancy, I'm fully invested when i can be. If i'm not getting the buy signals to keep me fully invested, it's probably not a good time to be buying.


Surprisingly, the losses of yesterday are no longer after today. I don't like this much volatility!

 

[easylikesunday]

Bourbon and a lapdance works wonders

That tends to fix most problems. haha

 

[Trembling Hand]

I don't like this much volatility!

Problem solved then.

Half position size and stop worrying. (or max positions held)

because this aint volatility.