Any trading method will experience drawdowns - a period of poor account performance is an inevitable part of trading. The retracement itself is not terrible. What really widens the gap is how traders respond during the retracement period. Psychological tests are often more severe than technical tests.<\/p>\n
The psychological phase of the drawdown<\/p>\n
The mentality during the retracement period usually goes through several stages: at first, you are unwilling to admit it and think it is just a temporary luck problem; then you become frustrated and start to doubt the method itself; when the pressure accumulates to a certain level, it may evolve into giving up or making a desperate move. Recognizing these stages can help traders realize where they are and avoid making major decisions during moments of intense emotional turmoil. The rhythm of the stages is different for different traders, but the rules are roughly similar; if you understand this path in advance, you will not feel alone when the retracement comes.<\/p>\n
Distinguish between two types of retracement<\/p>\n
Retracements are not exactly the same. In one type of retracement, the method has not changed, but the market environment is temporarily unfavorable, which is a normal fluctuation in the process; in the other type of retracement, the execution begins to deform - positions become larger and larger, stop losses are continuously relaxed, plans are frequently revised, and the deterioration of the account comes from the loss of control of the method itself. It is important to distinguish between these two types of retracement: the former requires patient waiting for circumstances to turn, while the latter requires immediate corrective execution. The criterion for judgment can be seen in the transaction records: if the execution of the loss orders is in line with the plan, then the retracement is more likely to come from the environment; if the loss orders are accompanied by obvious deformations, the problem lies in the execution link.<\/p>\n
Common dangerous reactions during the retracement period<\/p>\n
Two types of dangerous reactions are prone to occur during the retracement period. One type is eager to make money: increasing the position after a loss, hoping to make up for the loss with one transaction, but the result is often accelerated losses; the other type is frequent change of method: every time a few losses are made, a new idea is changed. The account has not verified any method, but has consumed funds and confidence. These two types of reactions have something in common, they are both emotionally driven deviations from the original rhythm.<\/p>\n
How to tolerate drawdowns<\/p>\n
Tolerating retracements does not rely on carrying on, but on adjustments: reduce the position to a level that is psychologically bearable, so that account fluctuations no longer interfere with judgment; return to the plan and rules themselves, and only do transactions that comply with the method; suspend trading for a period of time if necessary, and then re-evaluate after emotions calm down. Incorporating retracements into your trading expectations will also reduce panic when faced with retracements. The retracement period is also a time to test whether the trader truly understands his method.<\/p>\n
Digital observation of the retracement period<\/p>\n
Retracement periods tend to be dominated by emotion, and data can help traders stay objective. For example, in Wmax Broker, traders can use account history and reports to review whether the transactions during the retracement period are in line with the method: whether the loss came from the market environment or execution deformation; if they want to verify whether the method itself still holds true, they can also use small positions or simulated environment transition observations, instead of making heavy losses in emotions. Data transforms drawdown periods from a perceived problem to a checkable problem.<\/p>\n
Conclusion: Retracement is a process, not a conclusion<\/p>\n
Retracement is an integral part of the trading process and is not a conclusion for the trader. Only by understanding the psychological stage of the retracement period, distinguishing method retracement from runaway execution, being wary of eagerness to make money and frequent method changes, and using data to remain objective can traders smoothly pass through the period of continuous losses. For gold and silver traders, the ability to ride through retracement is a required course for long-term participation in the market.<\/p>","protected":false},"excerpt":{"rendered":"
Any trading method will experience retracement, and what really widens the gap is the way to deal with the retracement period. This article analyzes the psychological stages of the retracement period from unwillingness to admit to frustration to giving up. It distinguishes between normal retracements caused by unfavorable market conditions and out-of-control accounts with deformed execution. It warns of two dangerous reactions: eagerness to make money and frequent changes in methods. It also provides tolerance methods for reducing positions, returning to rules, and suspending transactions. It uses transaction record data to turn retracement from a perceived problem into a checkable problem.<\/p>","protected":false},"author":1,"featured_media":11431,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[122],"tags":[1764,1763,1762],"class_list":["post-11430","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tutorial","tag-1764","tag-1763","tag-1762"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/posts\/11430","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/comments?post=11430"}],"version-history":[{"count":1,"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/posts\/11430\/revisions"}],"predecessor-version":[{"id":11432,"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/posts\/11430\/revisions\/11432"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/media\/11431"}],"wp:attachment":[{"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/media?parent=11430"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/categories?post=11430"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/tags?post=11430"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}