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| Posted By: JF Posted On: Feb 28, 2009 Views: 1731 | Death Spiral Excellent article, as usual Mr CA, good sir. For the past 3 weeks I have deen trading like a wizard.Highly profitable every day, consistant. Before trading I relax, do some meditations, visualizations, then I turn on my Natura Sound Therapy for the trading day.So far so good,then came Friday.Here is how the "Dreaded Spiral" happened for me. 1. Position size, too large= Greed.Instead of drastically reducing my position sizes based on the probability of at least a few losing trades, I greedily doubled the size on the first trade of the day, this is what happened next, my Esignal platform crashed, and within minutes I was down thousand's of $$$. I quickly got the **** out of the trade on FAZ, BUT IT WAS TOO LATE, I was out of control emotionally, bang, right back into another trade on FAS, "Revenge Trade", of course you know what that results in, more losses. I caught myself and walked away from the computer to calm down and think about what happened.I know from experience that this can happen to any trader, so I refuse to beat the **** out of myself for screwing up. I later came back to my trading platform and made back some of the loss, but I was still quite shaken.I know exactly the mistakes I made and take full responsibility for them. Here is a list of the mistakes, and the corrective actions that will be taken. 1. I was undisciplined and impatient, didn't wait for my usual entry signal, wheneve I wait patiently for the right signal and entry, the trade usually works out right from the start. 2. I got cocky, thinking I was a genius, and got a forced feeding on humble pie! 3.Position size and risk management went right out the window. Th Fly EVEN WARNED ME THE NIGHT BEFORE " BE CAREFUL" is what he said. 4.Panic, on the first trade I should have just walked away to calm down before getting back in. The Good News is I walked away after the second trade, which for me is progress, not perfection. I hope this will help someone else, to make better trading decisions. Thanks. |
| Posted By: oofah Posted On: Feb 28, 2009 Views: 1778 | death spirals Great post, you have clearly experienced the death spiral first hand. Another thing to add the card: If you ever find yourself begging or praying to God during a trade, you are in a death spiral. Death spirals are the destroyer of accounts. You wake up from the death spiral after the close or later on that night and wonder what the hell happened and how could you ever get so out of control. Every trader must experience a few death spirals in his/her path to consistent profitability I believe. Personally, I stop trading and do a self-evaluation whenever I take consecutive losses. |