The drift of death: a short thread

The term “drift of death” came from a successful trader I worked with in prop.

There would be times when I’d be, let’s say, short and the market would be moving slowly against me...

Every time I’d check my position, I’d be a little more offside as the market crept against me with these small range candles until I was stopped out.

The small ranges and the seemingly listless movement would blindside me by making me think the market was slowing down or about to run out of steam when in actual fact it was rather strong.

Of course the opposite is the violent move. You know the one where you’re waiting to sell and the market puts in these huge range, green candles and you’re scared to stand in front of it.

I’d have limit orders in to sell and the market would steamroll higher in an aggressive move and I’d quickly cancel them only to later find out I would have been filled short at either the exact high of the move or close to it.

Over time I came to realise that I needed to reverse my thinking and do what felt the most uncomfortable. To stop trading against the drift and instead trade against the sharp moves.

Once I did this, my profitability increased.