Saturday, March 3, 2012

Handling the losing streak

Although the efforts of everyone in the formulation of trade, monitor and control your emotions, the period of inevitable loss can come. It is important to know the different strategies you can use to manage the time to lose. It is also useful to know the variables that can be tweaked to determine the style that suits you.
There are many ways dangerous and ultra safe way to handle the withdrawal period. Your choice which one you want to use.
You can change the variables
A. Trading Systems - If you do not believe in your trading system more, then of course you can switch to a system of completely new business.
Two. The risk of trade - can change the risk by trading more or less.
Three. Frequency of trade - can change how often you place an order on average higher or lower.


Strategies to attract the funding period
Now knowing the above variables, you can mix together to form a variety of strategies that can be used to manage the withdrawal period.
There are about 7 different ways to handle a series of losing trades. Seven different ways that you can draw period.


A. Major risks to business and commerce Increased Frequency trying to make money faster.
Suppose you're risking 2% per transaction and placing an average of 5 transactions per month. You fell 6% and try to recover. You increase the risk of trading at 3% per transaction, and at the same time you increase the frequency of exchanges on average 10 transactions per month.
This is definitely the most dangerous strategy that can feed itself and leads blown in the account.


Two. Increased risk of the trade to try to get money. You keep trading the same frequency.
Suppose you are risking 2% per transaction, and placed 5 trades per month. You fell 6% and try to recover. You increase the risk through trading up 3%, but keep the frequency of exchanges even close to 5 transactions per month.
This is the second most dangerous strategy, because while you hold the frequency of exchanges as well, you still increase the risk of trading.


Three. Keep the risk of the same trade. Increase the frequency of trading.
You do not take more risk in your trading. But you increase the frequency of exchanges in an effort to find other opportunities for a month. This is similar to the risks and dangers to number 2 above.


4. Keep risk to the same trade. Keep the frequency of exchanges as well. You just keep going and follow your system. No change.
Suppose you are risking 2% per transaction, and placed 5 trades per month. You fell 6% and to recover, you do not change anything. You still run the operating system you suspect you have an edge in the market. After all, if the system is good then your transaction will heal itself without changing any settings.
If your business system has real advantages, and you risk the right amount of trade which does not cause a significant loss if a series of consecutive losing trades happen, then you just have to keep doing what the risks and have the same amount and get the same job. Your membership will be recovered.
This is the strategy most likely to be implemented. It's right in the middle of a very dangerous strategy and ultra safe.


Five. Keep risk to the same trade, but a lower frequency of Commerce. This is starting to get more secure.
You do not risk more about your business. But you reduce the frequency of exchanges. So if you were to place five trades per month on average, you can cut two or three. Begin to be more selective in your trade and try to find the big winners. The best risk reward trade.


6. And finally, the safest is to reduce risk through trade and reduce the frequency of exchanges.
With this approach, you reduce risk by lowering trade and reduce your rate. If you have used a 2% risk per trade to five trades per month. You drop to 1% risk per trade and just looking for places 2-3 times per month.
Now you may ask, how are you supposed to recover from a draw when you reduce your risk per trade and reduce the frequency of exchange? This is where the big winners in. nailing Nailing of 5R, 10R, the 20R trade. You are more selective in your trading so hopefully your win rate increased slightly and / or your winners bigger.
This is by far the safest way to recover ultra withdrawal period.


There is another special method that involves a greater risk of the trade, but at the same time reduce your conversion rate drastically. So if you are risking 2% per trade and put the 5 transactions per month, you risk 5% per trade, and only put one or two transactions per month. How risky is this strategy will depend on what your system winrate. If you win the level very high, then it can work. If you win the level is low, then it could backfire and you have to choose one over the safety risks involved with reducing the trade and / or frequency of trading down.
The final method is to reduce the risk of trade, while increasing the frequency of exchanges.
Explain the relationship between risk and reward rate of victory in my previous post.

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