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Perhaps the one most important takeaway from my recent book is to intensively study your successful trading, build a list of best practices unique to you, and then turn those best practices into ongoing habit patterns that, combined, become robust best processes.
We can learn a great deal from the best practices of best traders. One area that has struck me as especially valuable is the best practices of traders in the midst of drawdown. Even the most successful traders encounter their periods of loss. How they manage the losses--and how they manage themselves during the periods of loss--makes a huge difference in terms of their ability to come back.
Here are three best practices for dealing with drawdowns that I've observed among the most talented and successful traders I've personally worked with:
1) Staying Constructive - Traders are often hardest on themselves just when they need to be picking themselves up. They blame themselves for mistakes and undercut their own confidence. When we first met Flora (shown above), she was an abandoned cat walking the neighborhood streets in New Jersey. Some of the neighbors were helpful, and Flora quickly figured out who to go to for a little food and shelter. She remained a homeless cat, but found a way to get by each day until we came along to adopt her. Staying constructive means that you double down on the search for ideas and activities that will sustain you during the lean times. One trader I work with was finding longer-term opportunities to be scarce, but found a way to successfully trade shorter-term patterns. Like Flora, he's kept himself afloat during the worst times and positioned himself for success as opportunities appear. The key is being able to become your own best support when times are tough.
Continue reading here: Source: Three Best Practices For Dealing With Trading Drawdowns by Brett Steenbarger
We can learn a great deal from the best practices of best traders. One area that has struck me as especially valuable is the best practices of traders in the midst of drawdown. Even the most successful traders encounter their periods of loss. How they manage the losses--and how they manage themselves during the periods of loss--makes a huge difference in terms of their ability to come back.
Here are three best practices for dealing with drawdowns that I've observed among the most talented and successful traders I've personally worked with:
1) Staying Constructive - Traders are often hardest on themselves just when they need to be picking themselves up. They blame themselves for mistakes and undercut their own confidence. When we first met Flora (shown above), she was an abandoned cat walking the neighborhood streets in New Jersey. Some of the neighbors were helpful, and Flora quickly figured out who to go to for a little food and shelter. She remained a homeless cat, but found a way to get by each day until we came along to adopt her. Staying constructive means that you double down on the search for ideas and activities that will sustain you during the lean times. One trader I work with was finding longer-term opportunities to be scarce, but found a way to successfully trade shorter-term patterns. Like Flora, he's kept himself afloat during the worst times and positioned himself for success as opportunities appear. The key is being able to become your own best support when times are tough.
Continue reading here: Source: Three Best Practices For Dealing With Trading Drawdowns by Brett Steenbarger
