Click here to get a PDF of this post

When your specific trading methodology quits working due to a change in the market environment, you are in a losing streak, or a drawdown in trading capital. There are things you can do to lessen the emotional and financial pain.

  1. In losing streaks, trade smaller and smaller until you start winning again.
  2. Trade less; only take your best set ups and entries.
  3. Take stops faster if you are shown you are wrong quickly.
  4. Take profits while they are there if the market becomes volatile.
  5. Look at the next highest time frame if the price action becomes erratic in your time frame.
  6. Have wider stops with smaller position sizing so you have time to be right, without being shaken out.
  7. Be patient and wait price clarity.
  8. Reduce your total risk exposure by limiting open trades.
  9. Limit your risk exposure with options versus stocks.
  10. You may need to switch to the selling strength short, instead of buying dips.