What to do when you are on a losing streak

[Wall Street Forum]

We've all had a streak of bad luck in the market that was mind-numbing and just plain annoying. Over the years I've developed some simple steps for dealing with a losing streak.

Step 1: STOP trading. Depending on what kind of trader you are you will know what a streak looks like. A swing trader's losing streak could be 3 trades in a row whereas a day trader is having a string of bad days(3 or more)

Step 2: Determine whether the streak is being aided by the market. Is the market choppy and too volatile?

Step 3: WAIT. If you don't know what to do next just don't do anything. A sideline position is the best position for a trader on a losing streak.

Step 4: Ease back in. Once you have followed the previous steps you can start to ease your way back into trading. Put on a trade 1/3 the size of your normal trades.

[Chang]

Sound advice. Losing streaks suck but the worst thing you can do is keep trading

[KDcain]

I usually just cut back position size. When I stop trading all together i just end up missing good trades.

[HitAndRun1770]

In my experience, cutting back is great and its almost never a good idea to stop during drawdowns. That's usually when you miss the boat on a bunch of great trades.