Have you ever blown up your trading account?

[M3peat]

I'm not voting (at this point anyway) b/c I've only been live for 6 months and don't consider that long enough for a valid poll entry. At 1 year, I'll gladly vote but if I had to now I'd be in the 'have not blown up my account but losing money'.

I've lost 30-35% of my account trading the ES, depending on the week, most of which was lost in the first 4 months of trading. I've been breaking even the last 2 months thanks to stupid newbie mistakes or else I'd be up during that time.

IMHO, the problem with the poll results will be that the majority of newbie's (most of which probably make up the 95%+ who fail) who blew up their account either were never on this site or left this site after blowing up. What's left here are a mixed bunch of "winners, losers and everything in between", skewing the results (making them look better than the reality). So as much as I like the poll idea, it won't tell us anything about reality.

As for me, I'm making classic rookie mistakes that I know are wrong and I'm slowly trying to eliminate them. The following is really for the newbie's out there who should learn from some of my mistakes.
A quick list of my wrongdoings:
- Overtrading
- Adding to a loser
- No patience/boredom (placing a trade when I don't see a 'setup')
- Reading ET posts as if everyone who posts knows what they are talking about
- Revenge trades (oh no you didn't Mr. Market, I'll make 'this' trade and get my money right back)
- Too short of stops, too long of stops (usually b/c I keep moving it)
- Trading 1 contract, which makes for a tricky exit strategy (no such thing as letting the winners run with 1 contract).
- Thinking the market makes sense, which it does not (good news does not make the market go up and vice versa).

And the list goes on...

And before you say it, I know you didn't ask for this answer but there is a lot stuff said on this site we didn't ask for

 

[M3peat]

I forgot the most important mistake for new traders:

Doing great in SIM trading means absolutely nothing when you go live .

 

[The Big D]

Quote from M3peat:

I forgot the most important mistake for new traders:

Doing great in SIM trading means absolutely nothing when you go live .

As long as your sim is decent, and you're not trying to move volume, this really isn't true. I agree there are some psych issues that separate the two, but being able to show a substantial win rate with high statistical significance in a simulated forward test is a very real step towards making money. If you're trading an automated system, the difference between the two may even be as small as throwing a switch.

 

[ammo]

Quote from M3peat:

I forgot the most important mistake for new traders:

Doing great in SIM trading means absolutely nothing when you go live .

agree with bigd, youre list of common mistakes should be eradicated in sim before u start cash trading, another rookie mistake is being too anxious to trade cash, lure of riches,clouds reality that you need more practice, the end result of a built house or a cooked meal is often the only thing noticed by the dweller or the one eating, the builder or cook went thru several steps too arrive there,so must the trader

 

[auspiv]

Quote from saliva:

I believe this response, which I wrote earlier, addresses your concern.

It almost describes my trading career perfectly save one point: I do plan on trading again at some point. I was young and dumb (18) when I started trading and of course I knew I could make it. Now I am going to take the time and go back and learn how to trade properly.

 

[saliva]

Quote from ammo:

agree with bigd, youre list of common mistakes should be eradicated in sim before u start cash trading, another rookie mistake is being too anxious to trade cash, lure of riches,clouds reality that you need more practice, the end result of a built house or a cooked meal is often the only thing noticed by the dweller or the one eating, the builder or cook went thru several steps too arrive there,so must the trader

Man, I didn't know you could be so articulate!
Very well said bro.

 

[M3peat]

Quote from The Big D:

As long as your sim is decent, and you're not trying to move volume, this really isn't true. I agree there are some psych issues that separate the two, but being able to show a substantial win rate with high statistical significance in a simulated forward test is a very real step towards making money. If you're trading an automated system, the difference between the two may even be as small as throwing a switch.

Well, for me it was several problems moving from sim to live. First off, there are definite emotional issues with being able to pull the trigger when real money is on the line where with sim I had no problems pulling the trigger. I also had the idea that I would be able to start trading with 3-5 contracts, which I definitely did not and do not do yet. I also, as I'm sure others new to this did as well, took chances I shouldn't have while in sim.
My mistakes probably apply to people having no prior trading experience. My related prior experience was investing which is totally different than trading, as I've learned.
I know of two other friends of friends who are also struggling since going live, so it's not just me, not to mention many posts I've read here saying similar thoughts.

I'm not saying it's a fact that my problems will occur with everyone but they are somethings to consider when starting out.

If you are saying you went straight into live making money, more power to you but you are the exception, not the rule. Hence the majority of traders fail theory.

 

[ammo]

hi sal

 

[saliva]

Quote from auspiv:

It almost describes my trading career perfectly save one point: I do plan on trading again at some point. I was young and dumb (18) when I started trading and of course I knew I could make it. Now I am going to take the time and go back and learn how to trade properly.

Please understand that wiping out a trading account does NOT in any way, shape, or form mean you failed as a trader. It's all part of the evolution, a very important learning process might I add.

 

[M3peat]

Quote from ammo:

agree with bigd, youre list of common mistakes should be eradicated in sim before u start cash trading, another rookie mistake is being too anxious to trade cash, lure of riches,clouds reality that you need more practice, the end result of a built house or a cooked meal is often the only thing noticed by the dweller or the one eating, the builder or cook went thru several steps too arrive there,so must the trader

Most of my comments to bigD apply to your comment as well and believe me, I'm learning more and more everyday and I'm almost glad its while I'm live since I'm paying a lot more attention to my wins/losses and strategy.