The Daily Market Forecast... winning streaks
Today’s Lesson: Call it a day?
How many wins in a row do you take before you quit? Since our strategies had a healthy 11 winners in a row yesterday this is a timely question.
Before we figure this out you should know that it is highly unlikely that you’ll duplicate the exact results of any strategy. There are trades you’ll miss, fills you won’t get, technology glitches, etc. When you hear or read about extreme success, please dial down your expectations of reality.
Even if you’re a seasoned trader with years of experience, winning trade after trade can really get your adrenaline flowing. It’s physiological. You just can’t stop it. This can lead to over confidence and poor judgement. You should have a rule in your plan.
There are a few schools of thought on when to quit a winning streak. All these philosophies are used by different traders on our team. Pick one that fits your personality.
- Set a dollar amount as your daily goal and quit when you reach it. This might be someone trading for a living and knowing what is needed to pay the bills is a priority.
- Trade until you lose. You never know the outcome of the next trade until it’s resolved. Why quit until then?
- Ignore streaks. One of our traders is a mathematician. He’s very unemotional and driven only by logic and numbers. He views a day, week, or month as arbitrary. If the plan truly has an edge then take every trade and get that edge.
It might be best to try them all individually and see what feels best for your personality. Trade Well,
Mike Siewruk
P.S. Join us every Saturday morning @ 10:00 ET for our weekly LookBack (5) trade review session. Every trade for the week is analyzed. Now open to the public. Meet the team. Ask questions. Register here.