When you do hit a losing streak, how do you handle it? In the past, I've sometimes tried to fight back by trading even heavier after I start losing, but that usually
doesn't work. Then I start cutting down very fast to the point of stopping completely if it gets bad enough. But usually
it never gets that bad.
Do you sometimes manage to fight your way out of it? Sometimes, but most of the time I would have been better off if I had just stopped. I've had trouble bringing
myself to do that, because I am a natural fighter. The typical pattern is: Lose, fight like hell, lose again, then cut
back, or sometimes stop, until I get on a winning track.
How long have you stopped for? Usually three, four weeks.
When you are in a losing streak, is it because you are out of sync with the markets, or is there a better way to describe it? I think that, in the end, losing begets losing. When you start losing, it touches off negative elements in your
psychology; it leads to pessimism.
There are very few traders who have been as successful as you. What do you think makes you different? I am very open-minded. I am willing to take in information that is difficult to accept emotionally, but which I
still recognize to be true. For example, I have seen others make money much faster than I have only to wind up
giving everything back, because when they started losing, they couldn't stop. When I have had a bad losing streak, I
have been able to say to myself, "You just can't trade anymore." When a market moves counter to my expectations, I
have always been able to say, "I had hoped to make a lot of money in this position, but it isn't working, so I'm getting
out."
Do you keep track of your equity on a day-to-day basis? Do you actually plot it? I have done that a lot in the past.
Is that helpful? Do you think it's a good idea for traders to plot their equity? I think so. If the trend in your equity is down, that is a sign to cut back and reevaluate. Or if you see that you
are losing money a lot faster than you made it, that would be a warning.
