A lesson learned from sudden market crashes
For more than a year, I relied on an averaging strategy in my trading.
It worked — most of the time.
Slow entries, gradual position building, and patience often produced stable-looking results.
But the market doesn’t always move slowly.
On October 10th, a sudden and aggressive market drop forced me to confront a reality I had been avoiding:
averaging strategies carry a hidden liquidation risk during extreme volatility.
That day changed how I think about trading.
The Problem with Averaging in a Sudden Crash
Averaging strategies feel safe in normal conditions.
They assume:
- price will eventually retrace,
- time is on your side,
- and liquidity remains stable.
However, during sharp crashes:
- price does not wait,
- volatility spikes instantly,
- and liquidation risk grows exponentially.
In those moments, there is no room to “wait it out.”
What looks like a stable strategy can collapse very quickly.
Why I Decided to Change My Trading Structure
After that experience, I strongly felt the need to change not just my entries, but the entire structure of my trading.
Instead of:
- avoiding stop-losses,
- adding to losing positions,
- and relying on recovery,
I chose to move toward a strict stop-loss-based approach.
This means:
- no additional entries,
- immediate acceptance of losses,
- and zero tolerance for liquidation risk.
The goal shifted from maximizing profits
to protecting the account first.
Why I Started with Three $100 Accounts
Rather than changing my strategy all at once on a large account,
I decided to adapt gradually.
I opened three separate $100 trading accounts and began trading them in parallel.
This approach allowed me to:
- remove emotional pressure,
- test discipline under real conditions,
- and focus purely on execution quality.
I have been running this experiment for nearly two months now.
The results are not spectacular — and that is exactly the point.
They are stable, controlled, and repeatable.
No Liquidation Risk: The Biggest Difference
The most important change I’ve noticed is this:
With immediate stop-loss trading,
I no longer worry about losing the entire account.
Losses are small, predefined, and accepted.
Compared to averaging strategies, this psychological difference is enormous.
I am no longer trading with fear of a single event wiping everything out.
More Opportunities Than Expected
One surprising discovery came from keeping a detailed trading journal.
Even without averaging:
- valid entry opportunities appear regularly,
- patience improves decision-making,
- and consistency becomes measurable.
This structure feels sustainable, not stressful.
Documenting the Process
I am documenting:
- the trading structure,
- the account results,
- and the decision-making process
through this blog and my other channels.
This is not about showing perfect performance.
It is about answering one question honestly:
Can a trader survive long-term by prioritizing structure and risk over profits?
What This Blog Series Is About
This blog will focus on:
- trading structure,
- risk management,
- small-account experiments,
- and long-term sustainability.
If you are only looking for quick profits,
this may not be the right place.
But if you care about staying in the game,
you may find this journey useful.
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