Trader Mindset How Professionals Handle Equity Drawdowns
Oct 9, 2023
Explore the psychological hurdles traders face during equity drawdowns. Learn how to maintain a stable mindset and make rational decisions amidst market fluctuations. Discover the importance of emotional resilience and how self-worth should not depend on financial outcomes. The discussion emphasizes personal growth and skill development, crucial for navigating both victories and setbacks in trading.
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Overnight Trading Yields Profits
- Trading overnight holds more profit potential than avoiding it for supposed risk reduction.
- Making fewer trades with bigger returns can be mathematically equivalent to many small winning trades.
Drawdowns Are Expected
- Michael Martin treats drawdowns as expected parts of trading, not extraordinary events to fear.
- Position sizing is key to minimizing drawdown magnitude and duration according to his experience.
Cut Losses Quickly
- Limit losses by surrendering positions quickly if trades don't move as expected.
- Follow your rules daily and don't let any single trade create emotional tilt.