Home > Lessons from the trading floor > $Debbie: Turning A Drawdown Month Into A Trading Month Of Positive Growth And Learning

$Debbie: Turning A Drawdown Month Into A Trading Month Of Positive Growth And Learning

September has been the most confusing month for me since I started trading full time a little over a year ago. Just one month prior I had my most successful month and knew that I knew what I was doing. At the start of my draw down month I got beaten around, in a big way, and took a pretty good hit to my psychology and P/L . I was left winded and wondering what the hell happened.

I took some time to recover, reflected, studied charts, watched the market and got back in the “saddle” again only to continue taking small losses and some small gains. As a result, I was unable to recover from the big hit to my P/L that I took at the start of the month.

The one stock that was my best the prior month turned into my worst, trades that I knew were good trades either did not work or worse worked and then suddenly stopped working and/or reversed their original direction without warning, and momentum has been lost for most of the month (at least in comparison to last month).

Since we are ending a month, it is time for me to gather all of my journal notes and do a cumulative overview of what happened.

As a trader, first I remind myself that I am solely responsible for my trades and my trading outcomes.  The market left me to figure out what was wrong with me and question what I missed because the market is neither right nor wrong. The market is simply a “machine” that just does what it does and does it over and over again.  

The following are my conclusions when I compare my August Performance to my September Performance.

  1. I am a very poor range trader. I am good at trading a trend. In August my two financial stocks basically trended much of the month.
  2. I failed to cut my initial loss on a trade decisively because I was expecting them to trend like they did much of August. I expected follow through at times when I should not have based on the internals.
  3. I tended to switch between stocks in my basket looking for something to do whereas in August I almost exclusively traded one stock.
  4. I failed to recognize early enough that there was a significant change in momentum between August and September.
  5. I failed to recognize early that breakout trades which worked almost all of August did not work at all in September.

The above six items really boil down to me not adjusting to conditions that changed and trading accordingly. Hence,  from my expensive  “trading class” this month I learned that I need to recognize the changes from month to month, day to day, and moment to moment in the market and stock conditions, adjust my trading to those changes, and embrace the change as opposed to trying to resist it or fight it.

To conclude my self-reflection, I am also taking the time here to remind myself and take pride in the fact that I know how to trade and I can trade effectively and make money as a result. So October begins a new month and a month where Debbie’s drawdown ends.

The question is: How do you turn a draw down month into a trading month of positive growth and learning?

  1. Take full responsibility for your trading decisions and actions and don’t allow yourself to think that it’s the market.
  2. Use your journals, past and present, to compare and find those hidden insights that we can easily miss from day to day.
  3. Remind yourself of what you have learned and the progress you have made since the beginning of your journey. You know what you know. It’s a matter of using it the right way in the right conditions. And draw the “line in the sand” where your drawdown ends and where you regain control of you and your trading.


 Profitable  Trading All!!



  1. Qamar S.
    September 26, 2009 at 4:01 pm

    My recent experience September was I realized that I did learn about volume and price

    action. I had money in my trading account ready to go. But market internals were telling me

    the “big boys” didn’t seem to be in the game. Volume for many of the stocks I watched were

    lower than previous months, though prices may have been higher. As a matter of fact many

    chart’s prices looked like a straight line to heaven or there about.

    I couldn’t help myself from being frighten out of trading. Not even intraday ten-minute plays.

    And the talk from nearly everyone was, a fall is coming and I didn’t want my money caught in

    any trap. Also, the downtrend of the past 3 days on many stocks didn’t help.

    In the end, like you say knowing about yourself and what you’ve learned is essential to

    building confidence.

    I know that I hate losing money. But I also know that with information from my research and

    reliable sources, I am more confident and assured that I can make better decisions and

    that I am not playing the Lotto (that is, throwing money away).

    I can also be happy that even if I felt like a chomp not trading at all, I did learn to preserve

    capital to trade another day, and that I can “sit on my hands”. As a new trader, with limited

    trading capital, that is good for me. So, I look forward to the day to be with the Keystone

    Trading team to change and improve the outcome of my p/l income. Great post Debbie!
    happy trading,

  2. September 27, 2009 at 1:02 pm

    Awesome Qamar! You bring up a great point—-volume!! Volume is one thing to continuously incorporate into the big picture. Thanks again!


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