Followed this guy for months because his strategy looked solid on paper. Risk management seemed tight, everything by the book.
Then he had one bad week and completely lost it. Started doubling down on losing positions, chasing losses, ignoring his own stop losses.
What red flags should I have spotted earlier? How do you actually test if someone has real discipline before putting money behind them?
Check their drawdown recovery - that’s the real tell. Smart traders shrink position sizes after losses and slowly work back up. The risky ones double down trying to get even quick. Also watch how they handle hot streaks. Good traders don’t change their sizing just because they’re winning. Bad ones get cocky and blow it all back. You need at least 6 months of data with some real losses mixed in. Anyone can stick to rules when they’re making money.
Find traders who stick to the same risk per trade, even after they’re winning. Most people blow up their accounts because they get cocky during hot streaks.
Watch what happens when their go-to strategy hits a rough patch. Good traders don’t budge - they stick with what’s proven even when it hurts.
Bad traders? They’re constantly jumping ship. One bad month and they’re completely switching strategies, chasing whatever seems to be working.
I also watch for desperate moves - like suddenly trading forex when they’re usually a stock trader, or switching timeframes they’ve never touched. That’s when you know they’re panicking.
Been burned twice doing this. Now I always check their worst losing streaks first.
Find traders who post their bad days openly. The good ones explain what went wrong and how they stuck to their plan. Huge red flag: only showing wins or making excuses for losses.
I check if they take breaks after big losses too. Smart traders step away to reset. Revenge traders keep pushing and blow their accounts.
Here’s a trick: watch their trade frequency during losing streaks. If they suddenly make 3x more trades after a loss, they’re chasing. Disciplined traders keep the same rhythm regardless.
Check their trade frequency during bad months first.
Watch how traders handle their daily loss limits. The disciplined ones stop trading the moment they hit their max - even when they spot a perfect setup. The ones who blow accounts? They’ll always find excuses to keep going. Also check if they’re posting trades in real-time or just bragging after the fact. Solid traders call their entries beforehand. Revenge traders only show you their wins.