What to do after a losing streak
Psychology
A losing streak is a normal part of trading. What makes it dangerous is not the drawdown itself, but the decisions a trader makes under its pressure.
A pause instead of revenge
After several losing trades in a row it helps to stop and not open new positions until the end of the day. Trying to win back losses quickly usually leads to higher risk.
Review with the journal
Check whether the trades were part of the plan. If the plan was followed, the streak is statistics. If not, the cause is the deviations, and that is what to work on.
Come back with less risk
Many traders temporarily reduce position size after a streak until they regain confidence in executing their plan.
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