Three Losses and Already Looking for a New Strategy?
You have a rough week. Three or four losses on the bounce.
That evening you're on YouTube and you find a new setup. It looks so clean. Everything about it makes sense.
So you switch.
For a few days you feel great again... then three losses later, you're back to square one.
If that's you, you're not on your own. Changing strategy after a bad run is one of the most common things traders do. And the annoying bit is it feels like progress every single time.
The reset loop
I call it the reset loop.
Rough week. New strategy. A few hopeful days. Three losses. Back to the start.
It's hard to break because a new strategy gives you a little hit of hope. It feels like you're doing something about the problem. Learning. Moving forward.
But look at what actually happens. Every time you switch, you throw away everything you'd built up with the last one. Your notes, your feel for it, your trade history. All gone.
A new strategy puts you back at zero. A small fix builds on everything you've already done.
Three trades tell you almost nothing
Three losses feels like proof. It isn't.
Any strategy, even a good one, will have runs of losses. That's just how a set of probabilities plays out. If you judge a method on three or four trades, you'll end up ditching every strategy you ever try, good or bad.
Give it a proper sample before you decide anything. Twenty trades at the very least, and more is better. Until then, a losing run is just a losing run.
What a GB cycling team got right
A good example of this is one of the best GB cycling teams in the world. Instead of hunting for one big change, they looked for loads of tiny ones.
→ They took their own pillows to every hotel, so the riders slept better
→ They had riders press lift buttons with their knuckles, so fewer got ill
→ They painted the floor of the mechanics' truck white, so they could spot any dust
Daft on their own. Nobody wins a race because of a pillow. But stacked up, race after race, they made the difference.
That's the bit most traders skip. Small fixes feel like nothing on the day. You don't get the buzz you get from a shiny new strategy, so it's easy not to bother.
Small fixes you can make to your trading
You can do the same with your trading. Keep your plan and pick one small thing to tighten up:
→ A proper night's sleep before you trade
→ Phone in another room while you're trading
→ Two minutes of notes after each trade
→ Checking your plan before you place the trade, not after
→ Closing the charts once your trade is placed
Just one. Not all of them. Do it for your next 20 trades and see what changes.
Why simple rules make this easier
This is a big part of why I keep my own trading simple. A few clear rules with yes or no answers, and about 10 minutes on the daily chart.
When your strategy is simple, it's much easier to see what's going wrong. You're not wondering whether it's the strategy, the indicator, the timeframe or you. You can change one small thing and actually see if it helps.
When a strategy has loads of conditions, every bad week feels like the strategy's fault. That's when the reset loop kicks in.
Try this before your next session
Grab a notebook and answer these three questions:
→ What's one small thing I could do 1% better this week?
→ How will I know I've done it?
→ What would I want to see after 20 trades?
Write your answer somewhere you'll see it. Then leave the strategy alone and work on that one thing.
Small, boring, repeated. That's how it stacks up.
Quick answers
Why do I keep changing my trading strategy?
Usually because a losing run feels like proof the strategy is broken, and a new one gives you a quick hit of hope. It feels like progress, but every switch puts you back at zero and throws away what you'd built up with the last one.
How many trades should I take before judging a strategy?
Three or four trades tells you almost nothing, because any strategy, even a good one, has runs of losses. Give it at least 20 trades, and more if you can, before you decide anything.
Is strategy hopping bad for traders?
It keeps you stuck in the reset loop. Each time you switch you start again from scratch, so you never build real experience with one approach or find out what's actually going wrong.
What are marginal gains in trading?
Small improvements stacked up over time, like a proper night's sleep before you trade, your phone in another room, or two minutes of notes after each trade. On their own they feel like nothing, but together they make the difference.
Have a good week,
Alan Edward
Want more like this?
I send one short email a week on the mental side of trading and keeping it simple. No hype and no signals. Join the free newsletter here.
Two more ways I can help, whenever you're ready:
Watch the free video on how I trade in about 10 minutes a day with simple, rule-based swing trades on the daily chart.
Read The Blueprint To Trading Psychology, my short book on why you break your own rules and how to stop.
About Alan
Alan Edward (The Divergent Trader) is a full-time trader. It took him about five years to get consistent, and he now teaches a simple, low-screen-time way to trade, plus the mental side that goes with it.
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