Have you ever blown up your trading account?
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Hi Slick,
Glad to meet you as well. I am indeed trading for a living and manage to make enough to make ends meet. At this point in my life, I do not harbor any unrealistic expectations. I'm neither young nor naive. I guess they go hand in hand. Right now, I need roughly $5,000 to cover the basic cost of living. That puts food on my family's table and covers the mortgage, including electricity and water. Another $2,000 is needed to cover personal expenses. So, all in all, I need at least $7,000 a month or roughly $318 a day ($7,000 divided by 22 trading days) to get by. As a ES trader, that means I need to capture 7 points (1 ES point per contract = $50) and I can honestly tell you that this is an achievable feat for me.
Be that as it may, trading is not easy by any means. No doubt, it can be very hard and at times damn frustrating. At the same time, I do not believe trading is so difficult that it's insurmountable. As long as you don't indulge in some outrageously unreasonable expectations, which many do might I add, trading should be not out of bounds for most new entrants. I believe most fail because they want instant gratification and take on leverage beyond their means, considering only the reward and not the risk. I certainly was no exception when I wiped out my trading account that was solely funded by my parents' retirement savings within the first six months.
Personally, I'm just an ordinary Joe Sixpack who's been around the market ever since the day I left college with a useless diploma some twenty years ago. I've never held a so-called "real" job. With the exception of blowing up my account, I feel very lucky to get this far in one piece.
Put a 20% dent in it over a period of 3 weeks basically broke my own rules and put way to much trust in the fundamentals rather than the numbers. You live and learn. 
here's some advice for all you guys that has saved my ass several times. When you lose 10% of your account, STOP trading live for the rest of the month and go to a sim account. refine your system and correct the mistakes you were making in the sim environment. this will allow you to learn and fix your errors before going live again the next month.
As you attempt to interpret the poll data, keep in mind Chapter 8 (Silent Evidence) from Taleb's 'The Black Swan.' It is likely that many of those who blew up their accounts and quit no longer read the forum.
fwiw, many times I've found patterns that look good over a 1 year period and then suddenly die at the start of a new year. This is just the result of normal shifts in market behavior, to be expected in the course of a trading career. You might want to take a look at your original strategy and figure out WHY it worked so well in 2009, and then see if, based on how the market is different this year, you can't make a few minor adjustments to fit current conditions. You may have already done this, but if not, it might be worth a try. The key is figuring out the fundamental reason for why the strategy worked before.
Certainly I can relate to your plight. I know for a fact that this market hates me because I always miss a golden opportunity by a mere tick or I would get stopped out only to see it continue in my direction. As sad as this may be, I'm still trading day after day. As my mama always said, ya gotta have faith in yourself.
Be that as it may, isn't it bit premature to judge an entire year's backtest based on one month's performance? Surely, you didn't have 12 straight positive months in 2009, eh? I bet ya January and February of 2009 were negative months. Anyway, market conditions have recently changed, so ya might need to tweak it a bit.
Yes, the question was for real.
It's not educational or motivational to read about people who have gone from success to success without overcoming any obstacels. Such people either have been exceptionally lucky or are hiding something.
Reading about people who succeed in a profession by overcoming difficulties is inspirational because this shows what a person from the real world can do with a little bit of the "can do" attitude. It's even more inspring when they have had obstacles one can relate to (see this thread about my "stupid patterns") and have sucessfully tackled them.
Quote from saliva:
Certainly I can relate to your plight. I know for a fact that this market hates me because I always miss a golden opportunity by a mere tick or I would get stopped out only to see it continue in my direction. As sad as this may be, I'm still trading day after day. As my mama always said, ya gotta have faith in yourself.
Be that as it may, isn't it bit premature to judge an entire year's backtest based on one month's performance? Surely, you didn't have 12 straight positive months in 2009, eh? I bet ya January and February of 2009 were negative months. Anyway, market conditions have recently changed, so ya might need to tweak it a bit.
I turns out I did basically blow out my account.
Here is my performance for January from one of my accounts:
1/3/2010 233.03
1/4/2010 -321.66
1/5/2010 -286.16
1/6/2010 -858.06
1/7/2010 1093.80
1/8/2010 -682.5
1/11/2010 1272.19
1/12/2010 -490
1/13/2010 -1519.76
1/14/2010 -1049.20
1/15/2010 812
1/17/2010 466.06
1/18/2010 121.66
1/19/2010 1465.93
1/20/2010 -2397.04
1/21/2010 -330.12
1/22/2010 353.5
1/25/2010 -1084.02
1/26/2010 -593.08
1/27/2010 -2158.68
1/28/2010 -908.78
1/29/2010 -473.34
These results were from my system that I had backtested over a year. I trade based on an algorithm, so there's nothing discretionary at all, I set it and forget it. Because I'm theoretically not trading on emotion, and just base it on a set pattern, I technically should trade every day regardless of the losses I take because if the system works, it will eventually even out. If I were manually day-trading, then definitely I would have taken some time off after a few days of consistent losses, but since this is supposedly automated, emotions shouldn't have been a factor and don't cloud my entries and exits.
However, after those last 5 days of consistent losses, and 7 out of 8 trading losses in a row, your mind really starts playing tricks on you. Emotionally, I couldn't take the relentless losses, and I went cuckoo.
I started trading discretionarily on the 29th, after suffering another loss, I tried to trade the GDP reports, and got whipsawed by the action on that day and almost immediately lost about $3k on the ES. I turned off my computer and stopped trading for the rest of the day.
I've begun to question whether or not I have a gambling addiction, and whether or not I should be trading at all. I do trade on margin, but my stop losses are set at a predefined amount, so I was never in danger of blowing out my entire account. But I did suffer about a $15k loss this month, which is enormous for me, a 25% drawdown.
I'm seriously considering calling it quits, but I'm giving it one more month, and I'm cutting down the size of my trades. Obviously, I'm trading too much both in terms of size and quantity. Mentally I didn't and don't have what it takes to keep my cool after sustained losses. I was trading 1 contract per $10k in my account, and trying to keep my stop losses per trade roughly about 2% of my portfolio, but some days it got to more like 3.5% because of volatility. I've cut down on the number of contracts as well as number and quality of trades drastically, down to max 1 trade a day (down from 4 trades a day).
Obviously, one of my biggest concerns is that the system no longer works, for whatever reason, so I'll have to continue monitoring things throughout this month. So far, the results are mildly positive again, but it's still a long month. As you mentioned, maybe the thing that made it work so well last year doesn't exist anymore so if that's the case, then I guess I'll have to just chalk it up to bad luck and either try to find something new, or just live life the old fashion way and just save my money and rebuild my savings again.