Add equity to beaten-down prop acct, or start fresh somewhere else?

[HungryMind1200]

I started trading remotely with a registered prop firm in January of 2015. I am working towards profitability but I'm not there yet. I've drawn down over 75% of this account over the past 9 months. At this point if I want to continue trading with this firm, I will need to add funds to my account.



I'm not overly enthusiastic about adding money to this account. I need the account balance to be positive (overall) before I can withdraw any money from the account. If I deposit 25k, and then lose 20k, I need to make the 20K back to bring the account to breakeven. From there I can start to withdraw any excess profit, but the account must stay over the dollar amount of my contribution. So if I had 30k in the account, with a 25k contribution, I would have 5k > my contribution and therefore I could withdraw 5k in that scenario.


So now that I’ve drawn down over 75%, I have a pretty substantial hole that I need to climb out of before I can withdraw from this account. Would it make more sense to close the account and start all over again - Give myself a fresh start? It doesn’t work that way with this firm (I cannot just create a new account), but I could always U5 with this firm and join another...


What do you think? How would you approach the situation if you were in my shoes? Would you keep adding to this account with the intention to dig out of the hole and eventually go positive, or would you start all over again now that you have a little more experience under your belt?

 

[rmorse]

You deposited $25K in a registered US Prop firm. That money is tied up for 1 year. If you add more funds, that money will be tied up for a full year. I don't believe you can go anywhere else until that year is up, or your will be dually registered, which should be an issue for both firms. I'm not sure they will U5 you before the year is up.

Tough bind. Are you sure your want to continue?

 

[HungryMind1200]

I have to check but I think you're right about registering with another firm during the lock-up period... Scratch that idea.

It should only take me a year or so to climb out of the hole and get the account positive.

 

[dealmaker]

I started trading remotely with a registered prop firm in January of 2015. I am working towards profitability but I'm not there yet. I've drawn down over 75% of this account over the past 9 months. At this point if I want to continue trading with this firm, I will need to add funds to my account.



I'm not overly enthusiastic about adding money to this account. I need the account balance to be positive (overall) before I can withdraw any money from the account. If I deposit 25k, and then lose 20k, I need to make the 20K back to bring the account to breakeven. From there I can start to withdraw any excess profit, but the account must stay over the dollar amount of my contribution. So if I had 30k in the account, with a 25k contribution, I would have 5k > my contribution and therefore I could withdraw 5k in that scenario.


So now that I’ve drawn down over 75%, I have a pretty substantial hole that I need to climb out of before I can withdraw from this account. Would it make more sense to close the account and start all over again - Give myself a fresh start? It doesn’t work that way with this firm (I cannot just create a new account), but I could always U5 with this firm and join another...


What do you think? How would you approach the situation if you were in my shoes? Would you keep adding to this account with the intention to dig out of the hole and eventually go positive, or would you start all over again now that you have a little more experience under your belt?

Assuming they U5 you, you will have to redo all the paperwork, fingerprinting, related costs, wait time etc. and will have to get familiar with a new platform and a firm, therefore if money is not an issue do not jump ship.
All that said you are probably best off staying away a few months and examining your trading.

 

[HungryMind1200]

This is my first experience with a prop firm... I'm approaching this like I would approach it if I was using a broker and I felt they were making me jump though hoops. I need to remember that this is very different.

I've been trading much better recently compared to my first few months, but I still find myself making dumb mistakes and breaking my rules from time to time. This is a full contact sport and I knock myself out more than I'd like to admit. It doesn't happen all the time, but it still happens more than it should...

 

[EPrado]

Absolutely would not add money to the account. A 75% draw down from trading is a massive one. Hopefully you are on the right track now and doing less and less dumb things. But I would definitely not add money. Trade very small the rest of the year until your expiration is up. If between now and then you see a big change in your performance, then add money. If not probably stay trading with small size. If it comes down to the firm then wanting more money between now and January, do not add money. Adding money when you are not trading well is the same concept as trading bigger during a real bad streak. Will lead to you probably losing a lot more. Maybe paper trade until January, and then pull your money out of the firm and reconsider everything. But let's say you add another 25k (now have 30k), then lose a lot again, you won't be able to pull the money out until late next year. Most likely instead of leaving the what you have left in there, you will say screw it, and continue trading until it's all gone.

I would definitely work on position sizing and money management. Losing 75% is a ton.

Are you trading futures? If so you definitely have to figure out the above.

 

[HungryMind1200]

I'm trading Equities. My PnL reports show that I've definitely improved, but I still make mistakes.


25k was a round example for the sake of easy math. In my case, I've drawn down about 11k from a 13k account. Nothing to sneeze at, but nothing to slit your wrist over either. It's an 84% drawdown but that's also a small account to cut your teeth with.


I was trading pretty small size to begin with, but I like the idea of trading smaller size for a little while. I think that I can eventually climb out of the hole, but I can't expect it to be quick or easy.


Too bad. I feel like if I could start all over again, I could probably get the account positive immediately. I have some work lined up for me.

 

[volpunter]

why would you want to move to another firm given you have proven you cannot make money? Makes zero sense. Unless your losing money is tied to the broker you trade through...which I doubt given your drawdowns. Reduce position size or simply stop trading. I have no idea how people can shop on ebay for days/weeks to buy 5 dollar items but make really dumb decisions when it comes to trading/investing thousands of dollars.

I started trading remotely with a registered prop firm in January of 2015. I am working towards profitability but I'm not there yet. I've drawn down over 75% of this account over the past 9 months. At this point if I want to continue trading with this firm, I will need to add funds to my account.



I'm not overly enthusiastic about adding money to this account. I need the account balance to be positive (overall) before I can withdraw any money from the account. If I deposit 25k, and then lose 20k, I need to make the 20K back to bring the account to breakeven. From there I can start to withdraw any excess profit, but the account must stay over the dollar amount of my contribution. So if I had 30k in the account, with a 25k contribution, I would have 5k > my contribution and therefore I could withdraw 5k in that scenario.


So now that I’ve drawn down over 75%, I have a pretty substantial hole that I need to climb out of before I can withdraw from this account. Would it make more sense to close the account and start all over again - Give myself a fresh start? It doesn’t work that way with this firm (I cannot just create a new account), but I could always U5 with this firm and join another...


What do you think? How would you approach the situation if you were in my shoes? Would you keep adding to this account with the intention to dig out of the hole and eventually go positive, or would you start all over again now that you have a little more experience under your belt?

 

[volpunter]

you surely did not trade small size RELATIVE to your account balance else you would not be under 84%. There are trading mistakes but then there are some fundamental flaws which, unless removed, will NEVER get you into profitable territory. One of which is order sizing, obviously an issue you seem to have problems with.

I'm trading Equities. My PnL reports show that I've definitely improved, but I still make mistakes.


25k was a round example for the sake of easy math. In my case, I've drawn down about 11k from a 13k account. Nothing to sneeze at, but nothing to slit your wrist over either. It's an 84% drawdown but that's also a small account to cut your teeth with.


I was trading pretty small size to begin with, but I like the idea of trading smaller size for a little while. I think that I can eventually climb out of the hole, but I can't expect it to be quick or easy.


Too bad. I feel like if I could start all over again, I could probably get the account positive immediately. I have some work lined up for me.

 

[HungryMind1200]

Sure I traded small size relative to the account size... You can trade a single lot of NFLX or TSLA and sit there like a deer in the headlights as it moves against you three or four handles. It's not necessarily the size, it's how you manage the position. I've made mistakes - that's part of learning. My goal is to survive long enough to get to the point where I don't make these mistakes anymore. I've gotten much wiser over the months but I still occasionally let my emotions get the best of me. It's the whole lizard brain thing - I still let the market fake me out from time to time. Of course I see it afterwards, but by then it's too late (hindsight vision is always 20/20).


Does that mean I should just give up just because I've had a painful 9 months and basically blew up my first account? How many of you guys have blown up your first account? - or rather I should ask, how many of you guys will admit that you've blown up your first account?


The point of the conversation is that if there was a way to "reset" the account, I'm confident that I would get it into positive territory considering the experience that I've picked up over the last nine months. That doesn't mean that I'm an expert master trader - it just means that I'm a little better then I was when I started. It's going to be very challenging to dig out of this hole but this is what I have to do.