Of paramount importance to the trader is fear.
Fear is a powerful, unpleasant feeling of risk or danger, either real or imagined.

I am convinced that it is necessary to “run scared”. Only an exaggerated emotion can generate the concentration necessary to survive as a trader. This is not necessarily for all traders. Some traders are pretty laid-back and relaxed when they trade.
In general, trading is a stressful business. In many areas of activity we see constant demonstrations of performing under stress. Actors of stage and screen; sports figures; cold-call sales people… It is the ability to thrive under stress that sets the best in their fields apart from the other participants.
An effective trader handles stress on a survival basis. His natural instinct of self-preservation emerges whenever he is in a stressful situation. His behavior is reduced to pure selfishness and self-survival. He fights for what is his or what he wants to be his in the in a most greedy way. He flees from danger in a most cowardly way.
There is no thought about pride or style or personal grace or honor or bravery.
Survive somehow.
Win somehow is his only purpose.
As a trader, you must get in touch with your baser instincts and learn to accept yourself in that way.

Trading is a battle against human survival instinct.
It takes a long time to have a person’s brain rewire to the point where trying to survive doesn’t override what that person does during the middle of it when the heat gets turned up. Everyone loses accounts their first year, many will lose accounts next years, no matter how well they were consistently doing demo trading because when emotions start happening it literally stops a person from being able to press the button out of pure fear.

Longs hope, Shorts fear

You go long. The pair tanks. You hold. You hope it goes up. Human nature is to have hope.
You short a Pair. Tat pair goes up. Fear is in your heart. There is no hope. You don’t hope it will come down, you fear it will continue to go up.

It is easier to cut your losses on hope or fear?

I think its greed and fear. Tanking pair create fear. Pair up big on news create greed. Fear is stronger then greed.
In my humble opinion it’s neither, fear & hope is a losing proposition over time. A trader that utilizes these emotions & expects to have good results is remote, a more likely scenario is a short lived trading career.
You are attributing two different emotions to the same phenomenon: specifically, experiencing a drawdown. I don’t see a lot of sense in that. I go short to make money & I go long to make money. When it doesn’t work out, regardless of the directionality of the trade, I’m not all that satisfied. Hope? Fear? I would’ve thought that proper risk management had pretty much removed them from the equation.
Money management isn’t going to help you feel much better if you get 10 losing trades in a row, even small ones. After a while you question the efficacy of your system, assuming you have one, and that’s when despair sets in. It’s not necessarily about the money, in which case position size or stops won’t help. Sometimes it’s about being right and having the self-confidence and faith in your system to keep trading.
If you do more research on a stock after you own it, to keep convincing yourself its a good position, than before you bought it, that’s when you should get out.
Mastering your emotions. It wasn’t until I shorted a stock and began to respect fear that I was able to learn to cut my losses earlier. The trend of the market is up so there was always hope from a loss if you have enough time, that was the monkey.

As i wrote here we need them, otherwise we are just a waste of time and funds…

11. Never do Cancel for the stop loss order after you have placed it!
12. Place the stop before or at the time you make your trade.
13. Never get into the market because you are anxious because of waiting.
14. Avoid getting in or out of the market too often.
15. Losses make the trader studious - not profits. Take advantage of every loss to improve your knowledge of market action.
16. In markets speculation The most difficult task is not prediction but self-control. Successful trading is difficult and frustrating. You are the most important element in the equation for success.
17. Always discipline yourself by following a pre-determined set of rules.
18. A bear market will give back in one month what a bull market has taken a three months to build.
19. Don’t ever allow a big winning trade to turn into a loser. Stop yourself out if the market moves against you 20% from your peak profit point.
20. You must have a program, you must know your program, and you must follow your program.

to be continued…

1. Plan your trades. Trade your plan.
2. Keep records of your trading results.
3. Keep a positive attitude, no matter how much you lose.
4. Don’t take the market home.
5. Successful traders buy into bad news and sell into good news.
6. Successful traders are not afraid to buy high and sell low.
7. Successful traders have a well-scheduled planned time for studying the markets.
8. Successful traders isolate themselves from the opinions of others.
9. Continually strive for patience, perseverance, determination, and rational action.
10. Limit your losses - use stops!

to be continued…

If supposed that a trader open pair positions in multiple currencies, long and short in direct currencies and long and long or short and short in indirect currencies: for example USD/CHF long and EURO/USD long at the same time and same lot size.
The Sum of the P/L of these two positions changes and when the total Sum of these two pairs reach to a specific profit, trader closes both positions at the same time. So in this strategy positions are always in hedge condition and have very low risk than other cases.
Why? Simply because correlation is important and they do not move in tandem accurately 100% of the time. And you can make money in these imperfections
Yes you could miss great opportunities to make a lot of money, but more important is that you will be stopped out less often.
Capital preservation is primordial and more important it all depends of your attitude towards risk.
It is not perfect but it works as long as you plan your trade and trade your plan.
I`ve tried this with EUR/USD and GBP/USD also with EUR/GBP and EUR/CHF daily trend as a base indicators.
This strategy worked 60% for me. Another 20% with ~0 profit, based on the SL/TP ratio (usually stop loses are far lower than take profits, but GBP moves have a higher amplitude. If one trade is wrong then SL is hit and that trade stopped, while the another trade is going its way until take profit is hit or trade is closed in advantage area).
20% of trades are unprofitable and want to say here that these 20% of loser will “eat” ~45% of earnings in total.
Statistics of this study:
Trades: 18 (*2) = 36
Time frame: 3 months.
Winners 11 (*2) trades. 11 wins, 11 loses. But the final result for every pair is a win.
50/50 7 trades.
7 losers, both pairs. All seven times first was hit one “stop loss”, then market turns back and hits another stop lose.
All stop loses were at 35-40 pips, TPs at 70-110 pips.

Advantage - ~2.5%/month of capital without stress.
Disadvantage - very long time frame, and low(?) level of earnings.

Well, losers! Want to say you - be happy with 40 or 50% of a move. Works well for every trader. You Should find what works for you, trail a stop, or close half. Whatever. It is not you money/profit until the trade is closed. …but once closed… Greed (of wanting more profit) is fighting with fear (of loss or giving back)! You have to determine which one wins.
Im sure if Steve Cohen, Paul Tudor Jones, etc did ‘fictional’ autobiograhies, people would treat those like the bibles as well.
What about close 50% of what ever position you got, take the profit and ride the other 50%?
I’m also trying to adapt my trading style - cut my losers as fast as possible and hold winning positions while adding to them. The problem i’ve been having is adding to my winners, and not closing them(!), and the whole psychological aspect of really only winning on nn % of my trades - it seems like i need a lot more discipline to make money with this approach (the discipline to not be afraid to get; then get out of the trade if it isn’t working; plus the discipline to hold onto the winner and try to add until my target is hit. I’ve been getting a nice lead on positions, then when i try to add to the winners i’m adding at the wrong time and getting stopped out for basically a break even trade. (Last week issues).

One thing i have noticed that will help is i’ll immediately stop myself out or add to the position within the timeframe of the chart i’m trading on….example: if i find a trade setup using a 1 hour chart i’ll enter the trade; and immediately (a) stop myself out after 1 hour if the trade isn’t working (the next 1 hour candle bar); (b) or i’ll add to the position after 1 hour if the trade seems to be working. Then, if i get stopped out, i’ll make myself wait another two bars before i try to re-enter another trade on the same side of the market…example: if i get a long signal on a 15 minute chart i’ll get long; if after the first 15 minutes the trade isnt working i’ll stop myself out; then force myself to wait another 30 minutes before i’ll try to re-enter the market on the long side….this keeps my losers smaller if it looks like the trade will run straight to my stop loss (i’d rather get out prior to my stop if i know the trade isnt working). It also prevents me from chasing the market after i get stopped out - it limits my impulse trades that i use to have after a losing trade and it prevents me from chasing the market.

Other thing that works for me is to put in my exits (targets, stop) and stop looking at it. Close the p&l window if you have to or watch your stoch and macd without P&L or you`ll get here.
…thanks to elitetrader, only close to me ideeas wrote down.

A very interesting/stressful situation for a trade a`ve been read on Coping with Depression following a major drawdown

LordMelbury said:
Hi All

I am 51 and been trading for 7 years full time, i have gone from around $1 million to over $2 million net assets but in just the last 12 weeks i have unbelievably and stupidly lost 600k, 300k thru trading and 300k thru a bad property deal.
LordMelbury saying here:
I was diagnosed with Kidney cancer 6 months ago, which thankfully i caught fairly early, but its been stressful, i have a 16 month baby and one on the way.

I mention the above because i think maybe i was pushing it to hard and trying to go for the home run in case i didn’t make it.( which i`m confident i will now)

I had my blackest day yesterday when i realised that i was 200k worse off then i thought thru a stupid mis calculation of my assets (what a jerk i am).

The feeling of guilt towards my family is immense, and i have been quite distraught and emotional, has anyone had a similar major drawback and come back again ?

( Suffice it to say, i stopped trading yesterday and intend to give it a rest for at least a few days )

His replays:
bgp:
yes, of course ! not as large of #’s ,but yes. dont worry about it . relax and put most of your money in 3-month t-bills . start off trading smaller and dont go for home runs. i have that problem.

good luck,
bgp

Odgnut:
I would definitely take a little break. The last thing you want to do is to trade with the mindset you’re currently in. You would probably trade more aggressively to try to make back your losses and just dig yourself into a bigger hole.

You need to also realize that even the great traders eventually go through large drawdowns at some point in their career. What I find therapeutic is to read some inspirational trading books like “Market Wizards” and “Pit Bull” among others…it’s a great comfort to know that some of the greatest traders in the world go through really bad trading periods…but through discipline and perserverence…they always come back stronger than before.

And If you’re married…I would also be completely open with your wife….you would be amazed how understanding someone that loves you can be….and getting this off your chest should relieve some of that stress. Going through what you’ve been through lately with cancer…I would think that your family values your health much more than any monetary losses you may have incurred.

And 1 million plus is plenty of trading money to work with. When you come back…just trade smaller until you get your mojo back.

Good luck.

more here:
Coping with Depression following a major drawdown