8 ideas after you take a large loss as a trader to propel improved trading results

I treated my dad to Game 3 between the Yankees and Red Sox last night.  I was pumped all day for the game.  Admittedly, I spent more than I should have for seats.  But I am a huge Yankees fan.  And my dad and I used to have season tickets for years before his health issues.  Even my son was allowed to stay up late to watch some of the game with him mom on TV.

Did I mention I was pumped for the game?

The Yankees got shellacked.  It was the single worst game my dad and I have ever attended as Yankees fans.  I tweeted in real-time:

An astute trader and friend of SMB made a cogent point about last night’s game and trading/life:

There are days when you will get your a$$ whipped as a trader.  It sucks.  I deal with the aftermath for traders as a trading coach to traders on our desk and other select traders, with whom I work outside the firm.

What do you do after getting you a$$ whipped by the market?  Here are eight ideas for  you to consider to improve your trading:

1. Start the month over.

One Consistently Profitable Trader on our desk, who started the month in a drawdown focused on starting the month over:

after last week, just not being able to string together any winning days / momentum and digging myself into a $5 – 6k hole, decided to just treat today and this week as the start of a new month… scale back for a couple days and just focus on making good trades, getting my consistency back and hopefully things compound from there.

2. Only enter trades after seeing confirmation of your trading idea.

One prop trader who drew down last week, had a long chat with him mentor and focused on seeing confirmation of his trading idea before entering.

We had a very long conversation about my trading and how I have been ANTICIPATING breakdowns w/ size rather than adding in after the CONFIRMATION.

I wanted to make it my goal today to be nimble on my trades until the CONFIRMATION.

3. Double down on your risk limits.

Another elite prop trader got whopped last month and decided to double down on following his risk limits.  He had been wrong on a few ideas, but lost way too much for him.  If you can minimize PnL losses on those inevitable poor trading sessions, then you can make significant progress as a trader.

4. Be green.

Another junior trader on our desk had a miserable day, his worst ever last week, and focused on just being green.  He focused on trading only his A+ setups.  He focused on finishing the trading session positive, no matter how small.

5. Double down on your trading process.

An experienced retail trader took a monster rip in IGC recently and decided to focus on doubling down on his trading process.  If this trader follows his trading process, then good trades come.

6. Wait for your A+ trades.

An experienced trader at SMB, after a massive loss, doubled down on just waiting for A+ trades to present themselves.  No more getting out in front of an idea, he proclaimed.   Just sit in your seat and wait for the easy money.

7. Find solutions to fix poor trading. 

I will offer an idea of my own.  After taking a huge loss, seek solutions so they do not happen again.  Focus on succeeding at implementing these solutions.  Our solutions, built into habit, is what blocks the worst days from reoccurring.

8. Take a day off.

Okay one more from me.  After a huge loss, go and clear your head.  Reset.  Go have some fun.  The markets will be there when you return.  And with solutions to trade better, you can attack the markets with a better plan.

*no relevant positions

*disclosure: huge Yankees fan

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