We always accept the fact that we should trade in a way that we stack the deck as much in our favor as possible, take the trade to the plan, then after that it isn’t up to us any longer. We know when we do this right, the odds are favoring us, and even if it doesn’t work out one time, two times, three times or more, that it will eventually work out, and over any longer stretch of trades, we know we’ll be fine.

Yes, it’s never easy when you are going through those inevitable negative streaks. And on paper when you see results and see small losing streaks you always tell yourself that you’d have no problem with that. Once you go live though? Another story. Suddenly that losing streak of four trades is unbearable. You do what many do: you radically change your strategy, you blame the markets, the strategy, the indicators, maybe yourself (though unlikely) and the dog. Then you make the even grander mistake of trying to chase performance with something else.

When you do that, that’s exactly when the strategy you just left wins eight out of nine trades and is way ahead over the longer stretch of trades. You started trading a strategy you weren’t familiar with, made mistakes and caught a losing stretch with that strategy. Now you have just amplified a problem and made it worse – the spiral starts and the account wipe out is well on its way. Don’t think this will happen to you? If you have traded for any length of time you have followed this cycle. We’ve done the exact same thing. It is in some ways a rite of passage for most successful traders. If you have not gone down this road you either have amazing discipline, or you have just started trading. In either case, if you can avoid succumbing to this emotion you’ll take years off your success plan.

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