080 - "My Best Losing Year Ever" - Better System Trader

Today we’re going discuss a point Dr Brett Steenbarger made in episode 25 of the podcast – the process of learning from trading challenges so that we can become better traders.

This doesn’t just apply to drawdowns or losses as Brett mentioned but also to other aspects of trading…

Strategy development…

Trading platforms…

Strategies that stop performing…

The batteries in your wireless mouse going flat again!

There are a whole range of challenges we face as traders which can be frustrating and difficult to deal with at times.

Roger can’t believe he shorted the low of the day… again…

We have a special guest who is going to share a story with us in just a minute but first I want to play a little bit more of that audio from Brett.

There was a little more to it that frames it nicely so let’s take a quick listen and then we’ll head over to our special guest, so over to Brett.

“The whole notion of acceptance, that you accept problems, you don’t fight against them, you use them as prods or stimuli for learning, I think it’s a powerful framework and very relevant to traders.

When we have a drawdown, how do we deal with that?

One way of dealing with it is by accepting it, that something has gone wrong.

We either have the wrong idea about the market or we have the right idea and traded it wrong.

But either case, there’s something we can learn from the drawdown, from the loss.

And so, by accepting the drawdown and then by actively trying to learn from it, we take an approach that could be frustrated and make us impulsive and we turn it into a learning experience that ends up being constructive.”

So the main point that Brett is making there is to accept the challenge, whether it be drawdown or something else, try to learn from it and turn it into a constructive experience and that’s where today guest, Tomas Nesnidal comes in because he is going to share with us an interesting experience he has had in his own trading.

Tomas has been on the podcast before, so you can hear more from him on the Better System Trader website but let’s head over to Tomas now and hear his story.

If you’d like to know more about Tomas or Market Internals too check out episode 52 – ‘An unfair trading advantage’.

Happy Trading,
Andrew.