Yikes! I've mentioned recently that I haven't had a losing month for 5 and a half years but after a few things going against me recently, I'm in danger of losing this record. It's a bit of a long story but the shortened version is that I've dabbled with the stock markets along the way for small amounts and always included any profits or losses in my monthly figures. Until recently the amounts involved have been insignificant (less than 1% of my bank) but unluckily for me a few of my shares have taken a big hit this month. Add to this a couple of decent size losses on the cricket and a couple of premium charges to boot and I'm now staring at the biggest monthly deficit I've ever faced. To get back to level for the month will be a big task.
I've been in a similar position once before - December 2009. Back then I suffered a maximum cricket loss and started to struggle trading the PDC World Darts Championships. With it also being a quiet month I was extremely fortunate to scrape back into profit to the grand sum of £6.38. A lucky escape, but this time the gap is wider and the pressure is on - yes, I have money put by to pay the bills but I can't underestimate how much maintaining that winning record means to me. Without it l'll feel like Superman in the presence of Kryptonite.
Okay, so what can I do to put things right and ensure panic doesn't set in?
These are the normal steps I take when I'm up against it, so I need to remember to follow them:
1. Accept the loss - The first step is for me to accept the position I'm in. The quicker I do this the easier it'll be for me to look forward. Clinging on to losses will only make things worse as scared money rarely wins.
2. Break the deficit into bits - By knowing how many events I've left to trade before the end of March I can estimate what I need to make from each to get back what I've lost. Of course, if an opportunity presents itself that's too good to miss then I'm not going to pull out because I've hit my 'target, but by instilling a pre-event expectation it'll help me with my lack of patience and control. Discipline will be more vital than ever,
3. Bank some quick wins - Confidence is such a huge factor so getting a few wins under my belt can help a lot. It doesn't matter if they're not that big, they just need to get me back on track. I don't want to be entering the last week of the month too far out of reach of breaking even.
4. Positive thinking - It's a powerful tool. The truth is I have a good history of making this game pay so I need to stick to what I know and banish any signs of negativity.
4. Positive thinking - It's a powerful tool. The truth is I have a good history of making this game pay so I need to stick to what I know and banish any signs of negativity.
4. Blog my results - A bit of a curve-ball this but I've noticed my thinking becoming a little hazy over the last few days. To help give myself some focus I'll blog my recovery progress between now and the end of March. I won't be giving exact figures but I will publish a nice graph! Here's my target graph at the moment:
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So there you have it, and if that doesn't get you onto my wavelength then there's only one thing left for it...
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5 comments:
Hi Mark,
Reading your post it sounds like you are about to start chasing your losses and are attempting to justify that.
If I were you I would "cut off" the month here and just try to have a profitable second half to the month, sure it will be nice if that covers your 1st half loss but if not so what?
Whether it's Sports, Nag, Forex or Shares 1 losing month in 66 is a record anyone would be pleased with - just so long as the 1 doesn't lose all you've achieved in the past 66.
I'd have to agree with Pete, sounds very much like a chasing mentality to me and reading between the lines looks like you've chased your way out in the past.
Not the most 'professional' thing to do, looking at your pnl in short periods, just as bad as setting a daily limit to be fair.
1. Accept the loss - obviously you haven't if you're worried about it causing you to have a losing month
2. Break the deficit into bits - Setting positive targets for individual markets now :) No doubt if you miss a target you can always up the stakes for the next one/
3. Bank some quick wins - that's the way forward, who cares about following a winning previous strategy , just dive in with some speculative lays/backs and cross your fingers.
I'm sure if you read this post on someone else's blog you'd come to the same conclusion, well at least I'd hope you would!
Thanks for the comments guys.
You could well be right but its been many years since I've felt that I'm chasing losses. Maybe I've let things slip recently but when I look at my sports trading I'm only very slightly down for the month.
Overall I think I've overreacted to a few bad swings but it's nice to get a different perspective so I appreciate the time you've taken to make your points.
Have to disagree about measuring your p&l in short periods though. Much better to have consistency and steady growth than to have huge variance in results. How can you plan around that?
All the best,
Mark
"Have to disagree about measuring your p&l in short periods though. Much better to have consistency and steady growth than to have huge variance in results. How can you plan around that?"
Consistency is always the key for the majority of traders. I fail to see how you assume measuring consistency using the pnl or short periods which are always susceptible to the odd loss. If you do wish to monitor consistency, which I'm in agreement you should, you really need to be looking at it over rolling periods rather than set periods.
At the end of the day you've just got to do what works for you. Other people can only throw in suggestions but doesn't neccessarily mean they'll suit you.
Just wrote a post about your record keeping. http://green-all-over.blogspot.com/2012/03/comparing-apples.html
A losing calendar month is meaningless in the whole scheme of things. Don't obsess with it - I've had 12 in the last 73. I don't like them, but they are to be expected. Once could suggest that you are too conservative if you've not had a losing month for so long, but what is the deal if you extract the stock market figures? That's the bottom line here.
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