Futures trading wipe out 1/4 of my account

I

innovest_11

Huge leverage, holding onto to big profit but gone overnight , sudden crash, huge losses due to whipsaw, normally I will not avg down but huge losses bring back this demon

Previously I have traded quite well with stocks, suddenly now I'm stuck with disaster trading futures , I have remove all futures symbol from my software

Even futures have huge leverage, smaller spread, but instead it bring me to hell
 
Quote from innovest_11:

Huge leverage, holding onto to big profit but gone overnight , sudden crash, huge losses due to whipsaw, normally I will not avg down but huge losses bring back this demon

Previously I have traded quite well with stocks, suddenly now I'm stuck with disaster trading futures , I have remove all futures symbol from my software

Even futures have huge leverage, smaller spread, but instead it bring me to hell
More...

Glad you posted this. Important to reinforce what really matters in leveraged trading (imo, anyway):

- Anything can happen in the markets; risk management plan must account for this reality
- Adding to a loser requires a very large capital allocation per contract (i.e. you probably should not do it)
- Using broker-provided leverage when not backed by externally located risk capital, especially daytrading futures margin, and especially the '$500 per contract gambling margin', is almost certainly a bad idea 99.xx%+ of the time
- Deviating even one time from one's risk management plan can lead to 'hell' as you pointed out

Reading such a horror story helps reinforce to my own trading what really matters, and that is to adhere to solid risk management 100.0000% of the time.. a lesson learned by many the hardest way. Overleveraging and adding to a loser without sufficient capital is, imho, the worst form of gambling, worse than 'selling all time highs where there is no resistance' or other such nonsense.

Trading is about staying in the game (risk management), not about being right or wrong. Again, jmho.

Thanks for sharing your experience.
 
Quote from innovest_11:

Huge leverage, holding onto to big profit but gone overnight , sudden crash, huge losses due to whipsaw, normally I will not avg down but huge losses bring back this demon

Previously I have traded quite well with stocks, suddenly now I'm stuck with disaster trading futures , I have remove all futures symbol from my software

Even futures have huge leverage, smaller spread, but instead it bring me to hell
More...



It's incredibly difficult to understand how some individuals allow a large gain to turn into a disaster. It only takes a fraction of a second to submit a stop loss order and it addresses that worst case scenario. Be objective for once. Get the emotional garbage out of the equation.

If the market rose on a particular day, it means that buying pressure was great, if the market tumbles the next day it means that bulls could not sustain it, and vice versa.

If anything, learn from this experience and apply it.
 
Quote from innovest_11:

Huge leverage, holding onto to big profit but gone overnight , sudden crash, huge losses due to whipsaw, normally I will not avg down but huge losses bring back this demon

Previously I have traded quite well with stocks, suddenly now I'm stuck with disaster trading futures , I have remove all futures symbol from my software

Even futures have huge leverage, smaller spread, but instead it bring me to hell
More...

Sorry for your loss, but huge leverage is your own choice. You are not required to use all the leverage that minimum futures margins makes available.

I am not aware of any markets that crashed today. The 1% to 2% down moves in the DJIA and the NDX are just bigger than usual daily blips. There was just a bigger percentage move up back on October 10th.

What are you going to do when the day comes along with the DJIA and the NDX going down by 10% to 15% ?

You should try trading futures with the same leverage as you use trading stocks.
 
This is why I dont hold overnight unless its cash options where the risk is defined.

When people tell me I should swing trade because its easier and not such a grind, I tell them that I like to sleep at night. I dont want to think about holding and some nutjob in the middle does something over night and market stocks gap down a couple bucks and I lose 5k before I exit.
 
Quote from innovest_11:

Huge leverage, holding onto to big profit but gone overnight , sudden crash, huge losses due to whipsaw, normally I will not avg down but huge losses bring back this demon

Previously I have traded quite well with stocks, suddenly now I'm stuck with disaster trading futures , I have remove all futures symbol from my software

Even futures have huge leverage, smaller spread, but instead it bring me to hell
More...

The market cannot take your money unless you allow it to do so.
 
Hey friend... I am sorry to hear for your loss. I go through catastrophic losses every now and then and it really breaks my heart to see the damage. So I just don't look at my PNL until weeks from now (on my prop firms account sheet) because it won't benefit me.

Some simple advice I can give you that I use for myself which was taken directly from the multi-million dollar makers at my prop firm:

#1 - TIME STOP
- Whenever I enter a trade, I know my time stop. Is this a trade I'm willing to 'work around' and utilise for 12-14 hours? Or is it something I want to be out of in 15-20 minutes?

-Before you enter your trade, just put a TIME in your head to get out. That's it. The time stop is the greatest stop of all. And never taught in prop shops.

#2- AVERAGING....
- Averaging MUST be done in order to succeed and make lots of money but it all comes down to the way you do it. You seem to be 'doubling down' which is, in my opinion, the quickest way to make money over 3 months then lose 3 months worth in one day.

-Next time you enter a position, I want you to mentally examine the next 'region' of price you want to enter again. And then, when it gets there, I only want you to enter with HALF (1/2) your current size. If you were long 2 gold, and it goes to your next average price, I want you to only enter with '1'. And then wait some more. Keep collecting in half size.


>

It took me a very long time to work out some tweaks in performing the execution as well as a sniper needs to hit his target on a battlefield... but it's worth it and absolutely necessary.

BLIND averaging/adding to position is a KILLER. Do NOT do it.

You will recover from your loss. If you don't learn from this, your next loss is going to wipe half your account.

Cheers friend xo
 
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