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EP36: Drawdown
When you read newspapers or novels, do you ever wonder if the words just flow freely for the author?
It’s inevitable – sometimes writers experience “writer’s block” – and times are tough…
For traders, a similar scenario also happens from time to time, with varying degrees of frequency, depending on the trading system. The dreaded “drawdown.” During these tough times, what should a trader do?
In this episode of 2Traders Podcast, Walter and Darren talk about drawdowns – having a few losers in a row, and how to cope up with it. They discuss the dangers that may come along and the “bad trading system” versus “bad luck” conundrum. According to Darren, there are two kinds of drawdowns. But how do you tell which is which?
Also, you’ll hear about when you may want to time your vacation.
http://media.blubrry.com/2traders/content.blubrry.com/2traders/2Traders_-_EP36_Drawdown.mp3
Download (Duration: 21:20 / 24.4 MB)
In this episode:
01:27 – real danger
03:13 – simple systems
04:39 – have a break
06:57 – good judgement
08:31 – different perspective
10:18 – over trading bug
12:09 – a new start
13:27 – get reinvigorated
15:09 – bad luck
20:13 – trading blindly
Tweetables:
When you’re in a drawdown, figure out who is trading well & why. [Click To Tweet].
The real danger is in changing your trading system because of a drawdown. [Click To Tweet].
After a heavy drawdown, take time to have break or a week off to clear your mind. [Click To Tweet].
Download The Full Episode 36 Transcript Here
Darren: When I’m trading, I’m listening to myself as much as I’m listening to the market. That’s why I’ve been looking out for these intense feelings, intense emotions and my instinct to kick in and say “this isn’t a good frame of mine to be trading in.”
Announcer: Two traders, Darren and Walter, pull back the curtain on profitable trading systems, consistent money management, and profitable psychological triggers. Welcome to the Two Traders Podcast.
Walter: Welcome to the Two Traders Podcast. It’s Walter here. I’ve got Darren on the line. How are you today, Darren?
Darren: I’m really good. Thanks, Walter.
Walter: Darren, I got this email from a friend, a trader I’ve known for a while. He’s a really good trader and he said “Walter, I’ve lived in a drawdown now and it looks like you are too. I’m just wondering what do you do here in this situation”.
I have some thoughts on this. I think that there’s a real danger period for a lot of traders when they get into drawdown and they have few losers in a row. What will typically happen is they’ll go one of two ways.
View all episodes
By Walter PetersWhen you read newspapers or novels, do you ever wonder if the words just flow freely for the author?
It’s inevitable – sometimes writers experience “writer’s block” – and times are tough…
For traders, a similar scenario also happens from time to time, with varying degrees of frequency, depending on the trading system. The dreaded “drawdown.” During these tough times, what should a trader do?
In this episode of 2Traders Podcast, Walter and Darren talk about drawdowns – having a few losers in a row, and how to cope up with it. They discuss the dangers that may come along and the “bad trading system” versus “bad luck” conundrum. According to Darren, there are two kinds of drawdowns. But how do you tell which is which?
Also, you’ll hear about when you may want to time your vacation.
http://media.blubrry.com/2traders/content.blubrry.com/2traders/2Traders_-_EP36_Drawdown.mp3
Download (Duration: 21:20 / 24.4 MB)
In this episode:
01:27 – real danger
03:13 – simple systems
04:39 – have a break
06:57 – good judgement
08:31 – different perspective
10:18 – over trading bug
12:09 – a new start
13:27 – get reinvigorated
15:09 – bad luck
20:13 – trading blindly
Tweetables:
When you’re in a drawdown, figure out who is trading well & why. [Click To Tweet].
The real danger is in changing your trading system because of a drawdown. [Click To Tweet].
After a heavy drawdown, take time to have break or a week off to clear your mind. [Click To Tweet].
Download The Full Episode 36 Transcript Here
Darren: When I’m trading, I’m listening to myself as much as I’m listening to the market. That’s why I’ve been looking out for these intense feelings, intense emotions and my instinct to kick in and say “this isn’t a good frame of mine to be trading in.”
Announcer: Two traders, Darren and Walter, pull back the curtain on profitable trading systems, consistent money management, and profitable psychological triggers. Welcome to the Two Traders Podcast.
Walter: Welcome to the Two Traders Podcast. It’s Walter here. I’ve got Darren on the line. How are you today, Darren?
Darren: I’m really good. Thanks, Walter.
Walter: Darren, I got this email from a friend, a trader I’ve known for a while. He’s a really good trader and he said “Walter, I’ve lived in a drawdown now and it looks like you are too. I’m just wondering what do you do here in this situation”.
I have some thoughts on this. I think that there’s a real danger period for a lot of traders when they get into drawdown and they have few losers in a row. What will typically happen is they’ll go one of two ways.