Hubert Senters here.
Let’s take a look at the market so right now we’ve got a little bit of roll over and all the indexes that you need to be super careful.
Russell is in the cloud. The Nasdaq is rolling back over. It’s down $114. The Dow rolled back below the turning and the standard line. It implies it wants to go to $33,000.
And the S&P is rolling back over. It acts like it wants to go lower so the Nasdaq is pulling the other two indexes. It’s kicking the stream and it’s going lower.
So you draw down so it might begin to increase if you’re not careful or if you don’t bump up your stocks or if you don’t learn how to short things.
Now, I’ve got a question from a viewer. I’m going to bring it in here really quick. He says Hi, Hubert. I have a trading problem that I call ”drawdown anxiety” and hope you can help. I hope I can too.
I’ve been trading for many years, mostly mutual funds. But for the past two years or so I have been day and swing trading options and futures.
So you’re going to mutual funds to day and swing trading options and or futures. I would pick either swing at first. There’s no way in hell you’re going to be able to master both of those timeframes. They’re two totally different creatures.
One super aggressive. And one is more calm so usually, it’s harder to day trade than it is to swing trade so I would start with swing trading first that might slow your blood loss down a little bit.
I believe my technicals are good and usually place a reasonable stop loss at the onset. Ok. Makes sense.
But when drawdown starts to ramp up I lose faith and the fear and the trade running away kicks in.
I use the reasoning. I was willing to risk $100 initially but it’s dropping so preserve as much capital as possible.
I’m not totally clear what you’re asking me here. I’m assuming you’re putting a stop loss in but then as soon as it goes against you $100 you then go oh, shit! I don’t want to use that stop loss. I want jump out where I’m only down a $100.
If that’s the case Ed, what I would do is place the trade, place the stop, walk away, don’t look at the trade. I am terrible at this.
Like if I look at the trade too much I might want to fiddle with it. And if I fiddle with it I’ll mess it up. But if I leave it alone and my stop doesn’t get hit, I’ll make money. Let’s see how this place at.
And then many times of course, I get stopped out and the price action goes in my favor never hitting the initial stop and would have been profitable. I get stopped out and the price action goes in my favor never hitting hte initial stop and would have been profitable.
So that’s exactly my point figure out exactly how much you really are willing to risk and if it’s only $100 then fine use a $100.
But don’t use a $500 stop loss and then jump out like a wuss with a $100 loss and then it only retraces a $150 and then cruises on want to make you a lot more.
Everybody does. You just have to figure out how to make yourself stop doing this. A couple of tricks is once your place the trade walk away make sure you have a stop loss and open target and just don’t lok at the trade so much.
You sitting there on the chair and on or over micromanaging it like micromanaging merry you’re just going to make the wrong decision you’re going to cause yourself tens of thousands of hundreds of thousands or maybe millions by doing that incorrectly.
That would be my suggestion. There’s not a real one trick pony answer to fix everybody because everybody pyschologically is a little bit different.
But figure out what you’re willing to risk, stick to that plan and quit jumping out early. Use the stop loss and adhere to that stop loss.
Let the machine the computer do its work and you quit freaking out about and you just over time you get used to it. It takes a while though.
Sometimes it can take three to five years. Sometimes it can take eight to twelve years. It all depends on unfortunately, sometimes it takes you longer to learn the lesson and then you run of money so that’s why this business is so dangerous. You got to be careful.
I’m going to be doing a special webinar on how to risk $156.25 to potentially make a $1,000 or more this Friday at noon EST. I can finally talk again so I can do these webinars.
I am getting really close to start doing a live session of this so this would be one of the very last few I would be doing. How to Make $1,000 or More Risking Only $156.25. Friday, May 21st at noon EST.
Click that big button right there. It will register you for the webinar. Once you do that first name, email address. If you give me your mobile telephone number I’ll give you a voice reminder and I’ll give you a text reminder about an hour before and then 15 minutes before.
In order to opt out of them. All you have to do is hit reply. Hit stop and it will take you out of that situation.
Good luck. Hope it helps. See you on the next video.
Hubert.
