How to recover from trading losses

One of the many fears that traders have when they enter a draw down period is that they will not be able to make the money back.  And the only reason they do not believe they will make the money back is if they do not have confidence in themselves and their system.  Or they have not broken their system down into a process that they can follow day after day that can find the great trades.  It is that fear of not being able to find the great trades and make the money back that can cause a vicious death spiral for the traders account.

Last week we  made  a gain of Rs. 3,000 out  of  Rs. 10,000 Capital .ie 30%  gain from 1 week 

This week we started with Rs 10,000 keeping the earlier weeks profit as a reserve. First 2 days were losing days . We lost Rs.872 , which is around 8.7% of our capital 

As we are now  into  2  draw down days you may suggest use those reserves to make it up. But is it a good trading discipline?  Never! We need to make a different strategy from tomorrow.  

The strategy is below 

The safe, conservative approach is to keep risking small amounts per trade as you previously were, or to actually reduce the risk per trade and cut back on risk.  

Earlier we were risking Rs. 20,000 per trade  and doing maximum 3-5 trades per day. Tomorrow on wards I will be risking only Rs. 10,000 per trade but I will be trading 8-10 trades per day

The reward risk ratio is key. Here I will try to make 2:1 . 

I am a strong believer of Excella Day trading system. I have no idea to change the stock selection method. I am confident in my system. 

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