When should I Review My Trading results? 6 of 7
How much of my account can I lose before I go back to demo trading and review what I am doing wrong.
We have heard from 10% to 35% draw down before you should stop trading and analyze what is happening.
We lean to the 10% area. You will have to decide what is right for you. Keep in mind the preservation
of capital.
Here is a little chart to see what it takes to recoup a loss at different levels.
% Draw down % Gain required to
Recoup loses
10 11.11
20 25.00
30 42.85
40 66.66
50 100
60 150
70 233
80 400
90 900
100 Out of Money
Once you reach your draw down level you should close all trades without thinking about it and find out
what you are doing wrong. Here are some things to think about:
Am I following my trading system?
Am I following my trading plan?
What is my state of mind?
How is my physical condition?
What do I need to do to correct the problem?
By following these simple rules of preservation you will be around for another day of trading and not be
emotionally and financially destroyed. We all can have a string of bad trades. The best thing you can
do is step back and give it some time. The most common problem of poor trading results is when a trader
gets away from the trading strategy that was successful for him. By using good money management and
following the trading rules will give you the opportunity to be able to stay in the trading game until you
can figure out what you are doing wrong. By having some rules to follow it is usually quick and easy to
see what is being done wrong. You should be able to spot some rule breaking by looking at just one losing
trade. You should not have to go for long periods of time and many trades to see that you are doing some
things different.
Tags: forex currency trading system, Forex Power Strategy, Forex Trading Systems
Comments
9 Responses to “When should I Review My Trading results? 6 of 7”
Leave a Reply
-
Social Links
I agree, a 10% drawdown is a good number to reevaluate your trading. Or, to be more general, as soon as you aproach your biggest drawdown, you should stop trading and figure out what went wrong.
Great post… When we reaches our draw down level, surely, we have done some mistakes that my lead to money loss, so it’s important to close all trades by then. after that, we really have to analyze what went wrong, so that, there wouldn’t be troubles and confusions the next time around.
Hey, Would it be possible to use this fabulous page on my webpage? I would of course backlink back to you. Let me find out what you choose to do.
A Quite easy to follow article . Any time i check your website i read a original view. Furthermore , as a new developer, i should mention that the structure of your blog is amazing . Can you post the name of the theme .
Thanks .
That would be fine to back link sites.
First of all ,you have picked a really unique theme . I think i might design something similar for a future website that i plan to create . On top of that ,i honestly enjoy most of the posts and your unique point of view. Thanks
Incredible blog! Terrific observation about the subject. Most certainly a new bookmark.
I think 10% is a good rule of thumb. 35% is way too high for me!
I’ve recently started a blog, the information you provide on this internet site has reduced the problem tremendously. I appreciate you for all of your time & work…