Last week I shared with you how October was a challenging month for our hedge fund. 

But wait. THERE’S MORE TO IT. 

What I didn’t share with you in that post was… that it could have been even worse. 

MUCH WORSE. 

And it wasn’t. 

Which I consider GREAT news. 

It was just a normally bad (yet frustrating) month and I’ve had plenty of them in the past already. It just felt more challenging than usual because the amount of money in our hedge fund keeps increasing. And quite frankly, hitting the full stop-loss on a 70-contract position in Natural Gas just s*cks, period.

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Besides, it also felt more frustrating than ever, because we just had 6 winning months in a row, and we started taking it for granted. So we got a bit ‘shaken’ when one single month whipped out the profit of the previous 1.5 months (which, again, is nothing unusual).

So, I had to keep reminding myself how much worse it COULD have been.

For example, having 5-6 WINNING months in a row used to be something non-existent. And my drawdowns used to be MUCH bigger. Now, they’re very reasonable and much easier to manage.

And on top of that, our drawdown recovery period is now about one-third of what it used to be many years ago.

So, overall, my trading is way different to what it used to be when I first started.

And one of the big reasons for this is that, over the last few years, I became a true “damage control” freak. You probably already know that, because I’ve been repeating it in these posts for a while.

And that’s what I definitely recommend to you as well.

Always work hard on new ways to control the damage.

And do this hard work especially during GOOD months. Because it means that a losing series could be just around the corner.

Get prepared. Be ready.

Always be ahead of the game.

When the challenges come (and they WILL), the damage control you use in trading will make them much more manageable. And you’ll sleep better too!

(And if you don’t know HOW you can start with better damage control, watch this FREE online workshop.)

Happy trading!

Tomas

 

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DISCLAIMER: Trading involves significant risk of loss and is not suitable for everyone. People can and do lose money. Hypothetical results have many inherent limitations. Past performance is not necessarily indicative of future results.

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