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    Surviving Drawdowns
    Surviving Drawdowns
    Surviving Drawdowns
    Ebook89 pages55 minutes

    Surviving Drawdowns

    By Andy Smith

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    About this ebook

    Thinking of trading for a living? Then you must know the trader’s maxim: “Cut your losses and let your profits run.”

    Simple advice, so why do around 80% of retail traders do just the opposite?

    Perhaps because, while it may be true that trading is simple and *anyone* can do it, human nature shows us that not anyone can do it *well*.

    Losing money hurts and, in the market, everybody loses sometimes. Even experienced traders. The thing is, over time, they tend to lose less than they win. Beginners do the opposite. Over-estimating their skills and under-estimating the risks involved they are often surprised by unexpected or crippling losses.

    Sometimes, losses pile up right at the start, when they've risked too much without really understanding what that risk is. Sometimes, it's after a winning streak, when lack of experience leads to overconfidence, extra leverage and a vicious turn of the market catches them loaded up and unprepared. Either way, it costs money they can’t afford and, most of the time, didn’t need to lose.

    Surviving Drawdowns is a concise beginner's guide to psychology, systems and position sizing. It will help you avoid those early mistakes and keep you in the game long enough to learn how to play it well.

    Surviving Drawdowns contains proven tips on how to create the trader's mind-set, how to build motivating objectives, how to avoid unnecessary losses and, perhaps most important of all, how not to let the market wear you down - financially or emotionally - until you've honed your skills enough to make the living you deserve.

    So read Surviving Drawdowns and prepare yourself! It may not make you rich - only guts, time and brains can do that - but it *will* help you avoid those expensive, beginner's mistakes.

    LanguageEnglish
    PublisherAndy Smith
    Release dateOct 27, 2017
    ISBN9781370701742
    Surviving Drawdowns
    Author

    Andy Smith

    Born in Birmingham, UK, to a teacher and a salesman, I studied Electronics and Computer Science before leaving for Austria, Congo and Nigeria to work in the oil industry. Some years later, armed with an MBA and several languages, I changed direction to take a job as an international development manager for a plastic company in Spain, Hungary, Argentina and Brazil, where the company went bust and I ended up stranded. But it was by choice, and I'm still here eighteen years later, with a wife and child! I tried my hand at running a gym, phone sales, the stock market and voluntary work, and even became a trainer in Neurolinguistic Programming. But I couldn't shake a nagging desire to write. So I did. I wrote and traditionally published three books in Portuguese (Ferramentas Mentais para Traders, Jeito Brasileiro and Soltando o Magro) before discovering self-publishing and writing two novels, Second Coming (historical/adventure fiction) and Tup (fiction, but based on real life and experience in Brazil). My young son seems to be following in my footsteps. He's already written and illustrated two short stories and distributed them to his school friends with, arguably, more success and a larger readership than his father!

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      Book preview

      Surviving Drawdowns - Andy Smith

      SURVIVING

      DRAWDOWNS

      By Andrew Smith

      Copyright 2017 Andrew Smith

      Smashwords Edition

      Why should you read this book?

      Because it will save you money.

      A very large percentage of retail traders are net losers. 80%, if what my online broker tells me every time I read my daily statement is true.

      80%. Think about it. Out of all those engineers, doctors, accountants, teachers, lawyers, architects, scientists and a whole host of other experts buying and selling, only two in ten know what they’re doing. What makes you think you’ll be one of them?

      Psychologically, risking your livelihood (and perhaps that of your family) on the ups and downs of the market is one of the hardest things you can do. However smart you think you are, however successful you’ve been up to now, however much money you’ve got to invest, or trade, once you dive in the market you’ll find you’re a very small fish in a very big pond.

      SURVIVING DRAWDOWNS isn’t a Holy Grail. It isn’t a magical trading system that will make you a fortune overnight. Only you can create one of those, through reading books and doing courses, or finding yourself an experienced mentor, or simply through trial and error, testing ideas, risking your money until you find something that comes out positive and doesn’t cost you sleepless nights.

      It won’t even tell you what to buy or sell and when to do it. That’s up to you, and learning to do it properly takes time, effort and money.

      SURVIVING DRAWDOWNS will show you how to take fewer risks, which means losing less money, which might keep your head and your finances in the game long enough to learn how to start making it.

      ***

      So, if 80% of retail traders are loser, where does all the money go?

      I’m sure you’ve heard about these guys...

      Actually, they don't want you. They don't care about you. You're irrelevant. They just want your money. They want you to pay their mortgage. They want you to put their kids through private school. They want you to pay for their big cars, their luxury holidays and their kitchen extensions.

      And, whoever you are, whatever you do, you’re probably going to help them!

      Not every newbie goes broke, so hopefully you won’t give all your savings to the sharks. But you might be hit by unexpected losses which, even if they don’t cripple you financially, will affect you mentally.

      Sometimes a trader’s loses pile up right at the start, when they've risked too much without really understanding what the risk is.

      Sometimes they get hit after a winning streak, when lack of experience leads to overconfidence, followed by paralysis when the market turns vicious and catches them loaded up and unprepared.

      Sometimes they’re the result of a string of ‘bad luck’. (Or is that bad decisions? Can you even tell the difference?)

      The aim of this book is to show you how to survive, how to not let the market wear you down and the sharks eat you up financially and emotionally until you've honed your skills.

      ***

      So, how do you survive?

      Easy.

      1) Know thyself

      2) Get real

      3) Get a system

      4) Get even realer

      ***

      1) Know thyself

      i) What do you REALLY want?

      ii) Why HERE?

      iii) What do you bring to the game?

      iv) How much can you throw away?

      ***

      i) What do you REALLY want?

      To get rich? To double your capital? To be a millionaire? To make a living? To earn some spare cash? (How much?) To be free? To be your own boss? To guarantee your retirement? To retire early? To dabble in the markets? To have fun or feel a thrill? To challenge yourself? To feel like a winner? To prove something to someone? To stoke your ego?

      Be honest… because nobody but you cares what your answers are.

      Think hard… because we all have powerful, hidden reasons for wanting to trade. Reasons we may not even want to admit to ourselves. In fact, making money often isn't what we want most, even if we swear it is.

      We all have psychological ‘wants’ or ‘needs’ we ignore, think unimportant or irrelevant, or of which we are blissfully unaware, but which affect our lives like the moon affects the sea.

      What are yours?

      Find them,

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