Trading Psychology | Why Our BRAIN Makes Recovering from Loss SO HARD
Published: 2024-11-15
Status:
Analyzed
Published: 2024-11-15
Status:
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
If the speaker reaches a $55,000 max loss and continues trading, there's an 80% chance they will double that loss to $110,000.
"when I hit my Max loss of minus $55,000 when I go down that much if I continue Trad I have an 80% chance of doubling the max loss and going down 10,000"
Pending
When a trader hits their maximum loss for the day, continuing to trade will likely result in even deeper losses.
"on a day like that when you're already at at you know Max loss what's going to happen is you're going to dig the loss deeper and deeper and deeper"
Pending
Consistently making $200 per day ($1,000 per week, $52,000 per year) can lead to recovering all trading losses over time.
"if you can consistently make $200 a day consistently $200 a day it's a th000 a week 1,000 a week that's $52,000 a year if you could do that consistently you will make back everything you've put into this"
Pending
The risk of entering 'trader rehab' is missing a significant market move, but the benefit is the ability to emotionally reset and return to trading with renewed confidence and consistency.
"the downside of not doing it is well what if there's a big move and I miss it okay that would be disappointing you're in Trader rehab you missed the move but the upside benefit that's your only downside your upside is that you will be able to reset emotionally and get back to trading from a place of confidence and consistency"
Pending
Accepting the current reality of a trading loss is crucial; resisting this acceptance will lead to 'revenge trading' in an attempt to recoup losses.
"accepting current reality is critical when you're fighting current reality when you're fighting to accept the situation that you're in it will lead you to continue engaging in the emotion seeking behavior of Revenge trading where you're looking for anything to trade to recover those losses"
Pending
Having a clear plan and roadmap after a significant trading loss provides a better feeling and changes the trader's perspective.
"I always always feel better because now I have a plan now I've got a road map and it totally changes my perspective"
Pending
The speaker's rule is to limit daily losses to an amount that can be recovered within the same trading day.
"I never want to lose more in one day than I can recover in one day"
Pending
During recovery, the strategy involves starting with small sizes to achieve 'base hits' and build a cushion, then gradually increasing position size up to a quarter of the maximum.
"focusing on base hits focusing on building cushion so building cushion means each day when I'm trading I'm starting with small size I'm trying to make 20 cents a share with small size build a little bit of a cushion and then once I have the cushion I'll size up a little bit more up to my quarter size Max position"
Pending
After about five days of trading following a significant loss, with some recovery made, the trader typically experiences a substantial improvement in their emotional state.
"once I've had usually about five days once I've had about 5 days between me and the loss by that point usually I've made back a little bit of the loss and I'm feeling emotionally a thousand times better"
Pending
The speaker experienced a significant drawdown after a long period without one, admitting they were not thinking clearly at the time.
"when I was showing you that 28,000 drawdown from the beginning of the year that was one of the first big draw Downs I'd had in months and I don't I don't know what I was thinking"
Pending
A track record serves as a reminder that adhering to trading strategy rules leads to success and consistency.
"the track record is a reminder that when you follow the rules of your strategy success and consistency follows"
Pending
Implementing a 'trader rehab' plan and accepting current reality can lead to feeling like a different person with renewed clarity and confidence within five days.
"if you put yourself into Trader rehab if you accept current reality and you start today following this plan ... 5 days from now you're going to feel like a different person"
Pending
After approximately five trading days following a loss, with some recovery achieved, the trader typically experiences a significant improvement in their emotional state.
"once I've had usually about five days once I've had about 5 days between me and the loss by that point usually I've made back a little bit of the loss and I'm feeling emotionally a thousand times better"
Pending
Sizing up trades again occurs only after the trader feels emotionally stable and has recovered nearly half of the previous loss.
"once I'm truly feeling emotionally better and I've made back close to half of the loss then I start to size back up for the next leg higher"
Pending
On the day of the recording, the speaker focused on securing small, consistent wins ('base hits') and successfully executed this strategy.
"so today was a day where I came in looking for base hits and I locked up base hits"
Pending
For traders experiencing an extended drawdown, the immediate priority is to stop further losses and implement a trading plan for a gradual recovery.
"if you've gone through an extended draw down your number one Focus right now has to be stop the bleeding and put yourself into a trading plan where you can begin your recovery slow and steady"
Pending
Consistently achieving small wins ('base hits') and securing small green days over a 5-10 day period can lead to a significant improvement in a trader's emotional state and confidence.
"if you could start focusing on hitting base hits locking up you know small green days 5 days from now 10 days from now you're going to feel like a different person"
Pending
The potential downside of entering a recovery phase ('trader rehab') is missing a significant market move, but the significant upside is the ability to emotionally reset and trade with renewed confidence and consistency.
"the downside of not doing it is well what if there's a big move and I miss it okay that would be disappointing you're in Trader rehab you missed the move but the upside benefit that's your only downside your upside is that you will be able to reset emotionally and get back to trading from a place of confidence and consistency"
Pending
Missing a single trade is inconsequential as the market will continuously offer new trading opportunities.
"you miss one trade who cares there's always going to be another trade around the corner"
Pending
The market will always be available for trading; this is an opportunity to build experience and intuition to know when to adjust trading intensity (ease off, get aggressive, or cool off).
"as I always tell you guys is look the Market's going to be here for you this is your time right now to build your experience and your own sense of educated intuition so you can get better at learning when to ease on the throttle when to get aggressive and when to cool off"
Pending
A disclaimer stating that trading is inherently risky, the speaker's results are not typical, and advising viewers to trade cautiously, manage risk, and recognize the market's endurance.
"trading is risky my results aren't typical so please take it slow manage your risk the market will be here for you"
Pending
After approximately five trading days following a significant loss, with some recovery achieved, the trader typically experiences a substantial improvement in their emotional state.
"once you've had about 5 days between me and the loss by that point usually I've made back a little bit of the loss and I'm feeling emotionally a thousand times better"
Pending
For traders experiencing an extended drawdown, the immediate priority is to stop further losses and implement a trading plan for a gradual recovery.
"if you've gone through an extended draw down your number one Focus right now has to be stop the bleeding and put yourself into a trading plan where you can begin your recovery slow and steady"
Pending
By detaching from the emotions of a drawdown and making even small incremental progress (e.g., $200 a day), a trader can feel positive and confident, regardless of the total amount still down.
"when you separate yourself from all the emotions of the draw down and you start having even just a little incremental progress that's when you feel like wow it doesn't matter that I'm technically still down $75,000 I'm making2 200 a day and if I can make 200 a day for the rest of this year for the rest of next year ... it's smooth sailing for me and I'm good"
Pending
Sizing up trades again occurs only after the trader feels emotionally stable and has recovered nearly half of the previous loss.
"once I'm truly feeling emotionally better and I've made back close to half of the loss then I start to size back up for the next leg higher"
Pending
On the second day after a major loss, the 'guard rails' include sizing down trades and focusing exclusively on high-quality stock setups where the trader has historically been most profitable.
"on day two guard rails number one we size down that's the first thing you've got to do you've got to size down number two you focus on a quality stocks that's going back to the basics of what your metrics tell you you do the best wherever you make the most money that's what you're focusing on for day two"
Pending
The speaker's rule is to limit daily losses to an amount that can be recovered within the same trading day.
"I never want to lose more in one day than I can recover in one day"
Pending
Traders without a proven profitable track record in a simulator should not be trading with real money.
"if you don't have a positive track record of profitability in a Sim what are you doing putting real money on the line you really have no business doing it"
Pending
Following a red day (or month), it is crucial to immediately implement 'guard rails' to minimize the risk of experiencing consecutive losing periods.
"after a red day or if it's for you maybe it's a red month or whatever it is immediately as soon as you become aware Implement these guard rails to reduce the risk of back-to-back red days"
Pending
Traders should be swift in reducing their trade size when market conditions become unfavorable ('cold') and develop a strong awareness of cautionary signals in the market.
"be quick to size down when it gets cold and learn to develop a keen awareness of caution Flags in the market"
Pending
During a recovery phase, the maximum trade size should be one-quarter of the usual full size, with a focus on securing small, consistent wins ('base hits') to build a cushion.
"Max size is one qu of full size Max size is one quarter full size focusing on base hits focusing on building cushion"
Pending
After approximately five trading days following a significant loss, with some recovery achieved, the trader typically experiences a substantial improvement in their emotional state.
"once I've had about 5 days between me and the loss by that point usually I've made back a little bit of the loss and I'm feeling emotionally a thousand times better"
Pending
Sizing up trades again occurs only after the trader feels emotionally stable and has recovered nearly half of the previous loss.
"once I'm truly feeling emotionally better and I've made back close to half of the loss then I start to size back up for the next leg higher"
Pending
On the day of the recording, the speaker focused on securing small, consistent wins ('base hits') and successfully executed this strategy.
"so today was a day where I came in looking for base hits and I locked up base hits"
Pending
For traders experiencing an extended drawdown, the immediate priority is to stop further losses and implement a trading plan for a gradual recovery.
"if you've gone through an extended draw down your number one Focus right now has to be stop the bleeding and put yourself into a trading plan where you can begin your recovery slow and steady"
Pending
Consistently achieving small wins ('base hits') and securing small green days over a 5-10 day period can lead to a significant improvement in a trader's emotional state and confidence.
"if you could start focusing on hitting base hits locking up you know small green days 5 days from now 10 days from now you're going to feel like a different person"
Pending
The potential downside of entering a recovery phase ('trader rehab') is missing a significant market move, but the significant upside is the ability to emotionally reset and trade with renewed confidence and consistency.
"the downside of not doing it is well what if there's a big move and I miss it okay that would be disappointing you're in Trader rehab you missed the move but the upside benefit that's your only downside your upside is that you will be able to reset emotionally and get back to trading from a place of confidence and consistency"
Pending
Missing a single trade is inconsequential as the market will continuously offer new trading opportunities.
"you miss one trade who cares there's always going to be another trade around the corner"
Pending
The market will always be available for trading; this is an opportunity to build experience and intuition to know when to adjust trading intensity (ease off, get aggressive, or cool off).
"as I always tell you guys is look the Market's going to be here for you this is your time right now to build your experience and your own sense of educated intuition so you can get better at learning when to ease on the throttle when to get aggressive and when to cool off"
Pending
A disclaimer stating that trading is inherently risky, the speaker's results are not typical, and advising viewers to trade cautiously, manage risk, and recognize the market's endurance.
"trading is risky my results aren't typical so please take it slow manage your risk the market will be here for you"
Pending
After approximately five trading days following a significant loss, with some recovery achieved, the trader typically experiences a substantial improvement in their emotional state.
"once I've had about 5 days between me and the loss by that point usually I've made back a little bit of the loss and I'm feeling emotionally a thousand times better"
Pending
For traders experiencing an extended drawdown, the immediate priority is to stop further losses and implement a trading plan for a gradual recovery.
"if you've gone through an extended draw down your number one Focus right now has to be stop the bleeding and put yourself into a trading plan where you can begin your recovery slow and steady"
Pending
By detaching from the emotions of a drawdown and making even small incremental progress (e.g., $200 a day), a trader can feel positive and confident, regardless of the total amount still down.
"when you separate yourself from all the emotions of the draw down and you start having even just a little incremental progress that's when you feel like wow it doesn't matter that I'm technically still down $75,000 I'm making2 200 a day and if I can make 200 a day for the rest of this year for the rest of next year ... it's smooth sailing for me and I'm good"
Pending
Sizing up trades again occurs only after the trader feels emotionally stable and has recovered nearly half of the previous loss.
"once I'm truly feeling emotionally better and I've made back close to half of the loss then I start to size back up for the next leg higher"
Pending
On the second day after a major loss, the 'guard rails' include sizing down trades and focusing exclusively on high-quality stock setups where the trader has historically been most profitable.
"on day two guard rails number one we size down that's the first thing you've got to do you've got to size down number two you focus on a quality stocks that's going back to the basics of what your metrics tell you you do the best wherever you make the most money that's what you're focusing on for day two"
Pending
The speaker's rule is to limit daily losses to an amount that can be recovered within the same trading day.
"I never want to lose more in one day than I can recover in one day"
Pending
Traders without a proven profitable track record in a simulator should not be trading with real money.
"if you don't have a positive track record of profitability in a Sim what are you doing putting real money on the line you really have no business doing it"
Pending
Following a red day (or month), it is crucial to immediately implement 'guard rails' to minimize the risk of experiencing consecutive losing periods.
"after a red day or if it's for you maybe it's a red month or whatever it is immediately as soon as you become aware Implement these guard rails to reduce the risk of back-to-back red days"
Pending
Traders should be swift in reducing their trade size when market conditions become unfavorable ('cold') and develop a strong awareness of cautionary signals in the market.
"be quick to size down when it gets cold and learn to develop a keen awareness of caution Flags in the market"
Pending
During a recovery phase, the maximum trade size should be one-quarter of the usual full size, with a focus on securing small, consistent wins ('base hits') to build a cushion.
"Max size is one qu of full size Max size is one quarter full size focusing on base hits focusing on building cushion"
Pending
After approximately five trading days following a significant loss, with some recovery achieved, the trader typically experiences a substantial improvement in their emotional state.
"once I've had about 5 days between me and the loss by that point usually I've made back a little bit of the loss and I'm feeling emotionally a thousand times better"
Pending
Sizing up trades again occurs only after the trader feels emotionally stable and has recovered nearly half of the previous loss.
"once I'm truly feeling emotionally better and I've made back close to half of the loss then I start to size back up for the next leg higher"
Pending
On the day of the recording, the speaker focused on securing small, consistent wins ('base hits') and successfully executed this strategy.
"so today was a day where I came in looking for base hits and I locked up base hits"
Pending
For traders experiencing an extended drawdown, the immediate priority is to stop further losses and implement a trading plan for a gradual recovery.
"if you've gone through an extended draw down your number one Focus right now has to be stop the bleeding and put yourself into a trading plan where you can begin your recovery slow and steady"
Pending
Consistently achieving small wins ('base hits') and securing small green days over a 5-10 day period can lead to a significant improvement in a trader's emotional state and confidence.
"if you could start focusing on hitting base hits locking up you know small green days 5 days from now 10 days from now you're going to feel like a different person"
Pending
The potential downside of entering a recovery phase ('trader rehab') is missing a significant market move, but the significant upside is the ability to emotionally reset and trade with renewed confidence and consistency.
"the downside of not doing it is well what if there's a big move and I miss it okay that would be disappointing you're in Trader rehab you missed the move but the upside benefit that's your only downside your upside is that you will be able to reset emotionally and get back to trading from a place of confidence and consistency"
Pending
Missing a single trade is inconsequential as the market will continuously offer new trading opportunities.
"you miss one trade who cares there's always going to be another trade around the corner"
Pending
The market will always be available for trading; this is an opportunity to build experience and intuition to know when to adjust trading intensity (ease off, get aggressive, or cool off).
"as I always tell you guys is look the Market's going to be here for you this is your time right now to build your experience and your own sense of educated intuition so you can get better at learning when to ease on the throttle when to get aggressive and when to cool off"
Pending
A disclaimer stating that trading is inherently risky, the speaker's results are not typical, and advising viewers to trade cautiously, manage risk, and recognize the market's endurance.
"trading is risky my results aren't typical so please take it slow manage your risk the market will be here for you"
Pending