Draw Down Experiences and Recovery

[kukyila]

Right on!

I'm still a newbie trader, in month 6 of live trading. While I look at the equity curve on my place account, it makes me ill. Nice climbing 3-8 week stretches punctuated by large drawdowns. Worst drawdown was 61% of my account. This has been $9k and that I still want to shout about it. Had a couple at 20-30percent and had a couple 10%. I have had stretches where I have doubled, tripled the account value. I'm up 40% in the previous 3 weeks, for instance. Overall, though, I am about 50% in the hole.

I would like to have a smooth equity... Thats some prudent advice, thanks for the donation

[kukyila]

Paul Rotter, arguably the finest and most prosperous trader ever, blacked out when he lost 2.5 million dollars during a draw down. He considered quitting and living a stable lifestyle , however like magnum enthusiast so elloquantly puthis desire and hunger for success overcame his fear of loss, he came back stronger and put on his gloves again in 4 weeks.

Its your failures that will decide your destiny, question is, how bad do you need it?

[Pugu83]

For now following the 1 month period is finished, I will write a line, and answer all questions.

Planned trades never enter drawdowns.

[koicha]

Paul Rotter, arguably the best and most successful trader , blacked out when he lost 2.5 million dollars through a draw down. He considered quitting and living a stable life, however such as magnum freak elloquantly his appetite and hunger for success overcame his fear of loss, he put on his gloves in 4 months and came back much stronger.

Its your failures which will decide your fate, question is, how bad do you need it? Kudos, the lessons learnt are significant and more significant is the way not to repeat the same mistakes again....
My own experience is that, there is tendency to replicate the exact same past mistake again, which are largely due to lack of my own analysis and not confident enough to act in a ideal way....in this match of probability, we should always search for the greatest probable installment, and there, one's personal replicate of mistake is disaster IMHO. Taking care of the bottom line will boost the top line...

[zomska]

Kudos, the lessons learnt are important and more important is the way not to repeat the very same mistakes ....
My own experience is that, there is tendency to repeat the exact same past mistake again.... Retrieval - relapse, recovery - relapse, it's normal. You will learn to not do in the event that you just keep trying in the event that you repeat the same error n instances. If you can stay alive long enough, that is...

[koicha]

Retrieval - relapse, retrieval - relapse, it's normal. In the event that you repeat the identical mistake n instances, you will come to learn not to do in the event that you keep trying. If you can stay alive long enough, this really is.... All that's ok, but till that time my account balance shouldn't become zero...

[maul13gs]

for now I am just going to write one single line, and answer all queries following the 1 month period is over.

Planned trades never get into drawdowns. As an ideal strategy. And any program is subject to the ever changing requirements of the market. Are subject to drawdowns. Oh and incidentally, Stop Losses are a brokers closest friend!

[mcabopa57]

Why did you you close it when it is moving in your direction? The daily tendency support line is 1.4700. The man says it is heading down there My plan stopped working and that I (let myself) obtained into big hole. I didn't have any available equity to work the new plan or receive a better average. If 1.5 broke I'd be talking about my margin call not just 5% I removed the table and obtained the F out of dodge with. I got to live another day that is enough and charged the machine gun pit with a slingshot.

P.S. Authentic narrative, after three days of the drawdown, the power went out at exactly the time those entries averaged breakeven. When I got back on the internet I saw a profit and booked it without any reservations.

[Pugu83]

My strategy stopped working and I (enabled myself) got into large hole. I didn't have any available equity to perform the new strategy or get a better average. If 1.5 broke I would be talking about my margin call not the 5% I took off the table and got the F out of dodge with. The machine gun pit charged and must live yet another day that's enough.

P.S. Authentic narrative, following three days of this drawdown, the power went out at precisely the time those entrances averaged breakeven. As soon as I got back on the internet I found a profit and booked... @ I found a profit and booked it with no reservations.

That is why to trade @ 0.5 percent to 0.05% margin used per transaction, since forex is a zero sum game, prices will constantly return, you should have the ability to hold your transactions longer.

I have seen folks holding red transactions over a year and shutting them green after.

Actual MM game.

[Engengmoboy]

Relapse, recovery. . .recovery,relapse.... This cycle may not work with a few pairs..say GBPJPY for example..you may relapse to about 700 pips before you even consider recovering!

[mcabopa57]

Pure MM game. Yeah, it was a lot simpler building shorts out of 1.49 on the road up to the very first bit of 1.5 and driving down that to 1.4780 with full margin. Took the same period of time. I did not believe a double top on the daily could have to shape before it contemplated shifting direction or falling into a range I will never have the ability to answer.

[kukyila]

As a perfect strategy. And any program is subject to the ever changing conditions of the market. People of us who don't use stop losses are subject to drawdowns. Oh and by the way, Stop Losses are a brokers closest buddy! Yeah learnt that lesson for certain! So many well renwoned brokers only hedge against your position and cash makers that are also being induce spikes which blow off your stops. In kingdom of Currency Trading considering egies to counter prevent searching is an integral part of trading.

[kukyila]

Planned trades never enter drawdowns. Can you really mean never? Or simply very rarely?

[Pugu83]

Can you really mean never? Or very rarely? You'll Be the first to Learn if There's any

[oxmayn1993225]

Nice thread guys,

speaking about drawdowns... I dropped close to 10% before finishing up 2% this week simply due to my E/J brief and U/J struck my TP 4 hours before close... Puh...

I had reduction after loss all of the way until Friday. If I had been a newbie (yes I am a newbie in forex but have been trading stocks for some years now) I'd have gone to random transactions and dropped more.

Anyways, my Epiphany came when I ceased thinking pips and concentrated on % instead. It comes down to at the end, because that's what. And if risking a certain% of this account you'll automatically risk more using a account and less as it's smaller Think of your account as being 10 times too big, do you risk the same?

I normally execute trades without believing (simply follow my strategy ) during the week and as soon as the week-end comes I reevaluate the methods I am using. I used to change my own strategy after each and every trade but there is not any point. You can not be a perfectionist in this sport, if it worked before, it is going to work and hopefully you have cash to be around to see it happen.

At a plogical degree it's intriguing to see how the emotions plays your head, however, I have to confess I were close to dropping out Friday this week but I am glad I didn't and hopefully this was the last time I will even believe it.

I'd love to add a chart about % drawdowns and ask a few questions.

1. How much would you think you can handle?
2. How much can you believe in your method?
3. When 10 losses on a row could occur, would you think in your system?
4. Would you attempt to bypass a few transactions in your method to spend less? Attempting to reverse the machine...

I feel these questions is what newbies have problems to see and answer truthfully.

Post Scriptum. Should I lose 20 days in a row I'd still be around...

Being entirely honest with your self is a good practice
-Sigmund Freud
https://www.nigeriaforextrading.com/attachments/15195354831316629363.png

[kukyila]

Nice thread guys,

Talking about drawdowns... I lost close to 10% before ending up 2% this week simply because of my E/J short and U/J hit my TP 4 hours before closing... Puh...

I'd loss after loss all the way till Friday. If I had been a newbie (yes I am a newbie in FX but have been trading stocks for a few years now) I would have gone to arbitrary transactions and lost more.

Anyways, my Epiphany arrived when I ceased thinking pips and focused on % rather. It comes down to in the end because that's what. And if risking a particular... You appear to have lived the hardest part of this industry every successful trader has to survive, you looked in the eyes and did not blink, or perhaps you did BUT appeared back. Following your elaboration I think you came out stronger, keep it up and thanks for its invaluable contribution.

[oxmayn1993225]

You appear to have survived the hardest portion of the industry every successful trader must endure, you looked it in the eyes and didn't blink, or perhaps you did BUT looked straight back. After your elaboration I think you came out stronger, keep it up and thanks for its invaluable contribution.
Thanks mate,
I think I've had the entire circle of learning (basics) to come around end up trading like I did at the start but using a different doctrine and comprehension of the market.... Se chart (trying to demonstrate my circle of learning)...

I think it's simpler to exchange when you truly think that failure and success is a very thin line and you don't have any idea where the market is going...

Another matter I want to add is the regular swapping between approaches when drawdowns occur. This is what I like to call Drawdown disease. Terrible illness where the sole reason for survival is risking small percent of this account... No matter how big/small acc. You have

The funny thing is no matter what I write here, new traders need to detect the problems themselves... But its healthy in the long run
https://www.nigeriaforextrading.com/attachments/151953548530231567.png

[kukyila]

Thanks mate,
I believe I have had the whole circle of learning (fundamentals ) to emerge around end up trading as I did in the beginning but with a different doctrine and comprehension of the market.... Se chart (trying to show my circle of studying )...

I think that it's easier to exchange when you truly believe that success and failure is a really thin line and you have no idea where the market is moving...

Yet another thing I would like to add is the frequent swapping between methods if drawdowns happen. This is what I love to call [b]Drawdown... LOL. Perfect a newbie just isnt informed enough to consume what you mentioned unless he experiences himself.

Also in my opinion, swapping systems during the mortal drawdown disorder has been demonstrates to be the fatal blow and disallows recovery or damages a potential trader beyond revival.

Simply set, Struggle is natures way of strengthening you!

[zomska]

Therefore, can it be pretty much required for a prosperous trader to have undergone significant drawdown, ruined accounts, margin calls, etc....???

I appear to observe that frequently here on the boards - yup, blew out n accounts before I became always profitable...

[kukyila]

Thus, is it pretty much required for a prosperous trader to have experienced significant drawdown, ruined accounts, margin calls, etc....???

I seem to see that often here on the boards - yup, blew out n accounts before I became always profitable... I dont believe theres a black and white response, sometimes people mature quicker sometimes they simply don't even following margin calls and sometimes they do after a big blow, it truly depends on the circumstances present at that point and how nicely a trader adapts and improvises in regards to this lessons hes learnt.

But whats for certain is, you will struggle, you will hurt, you will endure great plogical pain prior to succeeding, but thats not just Forex, thats life.

[kukyila]

I thought it'd be a fantastic idea to start a thread that focuses as part of any undertaking instead of the more popular profit dialogue. I'd love the fish on this website to share experiences accentuating the draw downs they have faced before attaining success in this rewarding yet unforgiving industry, while walking this path. This would also inspire newbies, rookies and traders using a spot to know that success comes to the perseverant. It's the collective result over a period of time that matters. Additionally, it might help the ones that switch systems in an alarming speed since it's in the hole for a bit to understand how critical it's to judge a system not only by the success it accomplishes but by its own core sustenance worth (Surviving in bad times is a lot greater than winningbeing profitable at good times).

Please discuss the worst you have experienced and further elaborate on the mental and physical recovery process that got you back into the game, not just relative to if you began trading as a newbie but also the failures and mental stress you endured after being the tough core successful trader you're.