I haven't lost anything until I sell my SPNG.PK
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LOSING traders - How much money and time have you lost?
- Thread starter Airwaves
- Start date
#1 rule, keep loses small
i have two friends who are "professional" poker players and believe it or not have pulled over +1mm from online cash games. one is actually ranked top 10 in the world in heads up high stakes sng..
i was trading well before i met the two but only became profitable when i really sat down and listened to their methodologies of "bankroll management". to this day i am no good at poker, but i can spot a good entry into any instrument all the time. my entries into trades are world class, but the reason i am not a millionaire trader is because of my exits. point being.. i very much believe it is possible to win this game, and although more difficult and complex than poker, trading is the biggest game on earth.
-out of the last 1000 trades, 5 have destroyed my equity curve. something like +200+200+200+200+200+200+200+200+200+200+200+200+200... and then [-2000].. as long as you can limit those big loses. there are so many different ways to beat this game, you can try mean reversion, pair trading, breakouts, fading.. just limit those loses
i have two friends who are "professional" poker players and believe it or not have pulled over +1mm from online cash games. one is actually ranked top 10 in the world in heads up high stakes sng..
i was trading well before i met the two but only became profitable when i really sat down and listened to their methodologies of "bankroll management". to this day i am no good at poker, but i can spot a good entry into any instrument all the time. my entries into trades are world class, but the reason i am not a millionaire trader is because of my exits. point being.. i very much believe it is possible to win this game, and although more difficult and complex than poker, trading is the biggest game on earth.
-out of the last 1000 trades, 5 have destroyed my equity curve. something like +200+200+200+200+200+200+200+200+200+200+200+200+200... and then [-2000].. as long as you can limit those big loses. there are so many different ways to beat this game, you can try mean reversion, pair trading, breakouts, fading.. just limit those loses
How can you possibly 'blow an account' on one trade? It's painfully obvious that the most important element of your trading plan is MIA - Money Management. The only reason that I'm responding is that it also took me a number of years to finally understand what all the hoopla was about concerning MM.
Have you ever read the simple fact that it takes like 84 losing trades in a row to blow an account when risking 1% of your equity per trade. It's understandable that most traders fail, when they are working with small accounts, and trading the futures mkts - they can't possibly use intelligent stop placements without incurring individual losses that eat up 5%, 10% or more of their account.
The above is the one advantage of trading the forex. Most brokers will offer a large degree of granularity relating to position sizing. A small account will force you to trade microlots and will take some time to build a decent sized account, from which each winner will actually mean something, in terms of actual monies. But proceeding in this manner will allow you to slowly develop your trading methodology, while more importantly afford the opportunity for you to gain the psychological strengths required in trading.
Trading is a slow and arduous journey. And it requires that you EARN the right to match wits with the big boys. Any fool can step up to the plate and throw money at them. You have invested a lot of time - now it's time to actually learn what is required. It can be accomplished - good luck to you.
Airwaves, I had the same thing happen to me with the GBP/USD except the opposite, every time I kept on having to deal with huge rises. I simply switched the currency pair I was trading to something that was less volatile and now instead of losing money the only thing I lose is time. I'm exiting out of a losing trade at 90 cents now but all I need to do now is make sure that I stop repeating the same stupid mistakes.
I recently felt some extreme torture this week where I missed out on almost $80 worth of profit from one of my trades but it was far better than having my account wrecked for the third time due to crazy bumpiness of the GPB/USD. I recommend only trading that one and the EUR/USD when you have a good amount of capital behind you because otherwise the loss would just be too much.
I recently felt some extreme torture this week where I missed out on almost $80 worth of profit from one of my trades but it was far better than having my account wrecked for the third time due to crazy bumpiness of the GPB/USD. I recommend only trading that one and the EUR/USD when you have a good amount of capital behind you because otherwise the loss would just be too much.
Can you explain those terms or direct me to one that you trust which does?
Thank you kindly.
Hi Meph.
In this occasion, my account was already on its last legs and i decieded risk the last of my account on the trade.
I opened up a forex account trading very small stakes using stops. As mentioned, in the past the only time ive made money is from not using stops, but i know that unless you have an unlimited amount of money, the market will bite you at some point.
So, i traded small stakes(mini lots), and took stop after stop like a robot. In the past I would have reverted to my 'stops are for girls!' policy much sooner, but i really wanted to progress. So i carried on, stop pit after stop out. After a few months of this my account had drastically shrunk, losing $50 or so per day, which is when i bought GBP/USD at about 1.4940 or so (i think)
It then began to tank, and my broker closed my position out within 3 ticks of the low so far, as i could no longer cover teh margin.
Based on experience, the GBPUSD should now rally quite hard, making me feel a little sick. (its already put 100 points back on within hours of stopping me!!)
It happens every time. I can think of about 5 times off the top of my head. Most memorably the ES low last March or so at around 666. My account blew up at around the low tick from being long. It then rallied like nothing i'd ever seen before, and would have given me my money back with interest in a matter of days had i been able to hang on about 2 more points!! lol
I felt sick for weeks, watching it rise.
You don't know how to trade. You don't have an "edge", so you're trading based on your opinion instead of learning how to interpret crowd sentiment through price action.
Here's an exercise that takes advantage of crowd psychology. If price is in an uptrend and approaches the last high, go long a few ticks before the high, or a tick or two above the high (or should I be referring to "pips"? Never traded Forex, but sim traded it with my son once, buying breakout through the last high). Your stop should be very tight, because a real breakout means the crowd thinks it's going higher and they want to be on that train; a failure to keep going means the breakout failed and was nothing more than stops getting triggered, and likely indicates a reversal. This is exercise works in an established trend or after an initial strong move; NOT in a range.
Are you uncomfortable buying at or above the last high? If so, then you've pinpointed one of the reasons you're having trouble profiting.
Something else you can try and likely find success: When you think of putting on a trade, choose where you'd place your disaster stop and wait for price to get there before trading.
Quote from Vulcan Trader:
EVERY successful trader starts off like you just described above. If they claim otherwise then they are lying!!! I must have blown out at least $100,000 in the beginning due to several reasons.
1. I was new to the business.
The learning curb is STEEEEEEP!! It will take at least 10 years or 10,000 hours to become an expert. Anything less you can hang it up.
2. Lack of understanding.
Being new to wall street i was not allowed to trade on my own. The firm did not allow rookies to trade their own methodologies at first so you had to take the firms reco's.
3. under-capitalization
This is a $60,000 word. It means that for whatever strategy you are trading there must be enough capital in the account to survive the worst draw-down the historical model indicates x's 2. So in other words if your back-test shows a max draw-down of $5,000 you better prepare for $10,000. Also, point 2 above should include lack of understanding leverage and liquidity.
4. lack of robust system.
I will need to elaborate further on this one. The definition of a robust system requires a system that is efficient in ALL market types and situations including the adaptability to changing market conditions. In other words the system should be able to adapt quickly to changing market conditions as they occur on weekly and daily charts. Moving averages are lagging indicators. If simply referring do changing conditions on weekly and daily charts and NOT intraday. Since the markets are extremely efficient ie controlled and manipulated by the govt by way of Goldman Sachs and JP Morgan better known as the PPT you must be able to discern true order flow from jive artificial liquidity. Tape reading is a must. You have to be able to read the bid ask and volume to be able to be nimble. Day trading is a losing game but a necessary requirement at becoming a master of the markets. I repeat ............day trading is a MUST! If you will hope to become a pro you will have to be able to complete the daytrading Bachelors program before advancing to the Masters program of Swing trading off daily and weekly bars. By daytrading you will learn discipline and chart types and formations. You will learn to read the tape. you will learn to build a system along with rules so that you can become more efficient in the long run.
This will be a long long long painful stressful mind numbing energy draining fulfilling experience. You will either come away from this a better person or you will simply quite give up and walk away. NOTE: many successful traders walk away at some point in the begining. However the greats always come back for more and learn from their mistakes. The market WILL humble you. It does not matter on your pedigre, education, background or training. You can be a doctor, lawyer, accountant, have an MBA from harvard, Yale , Princeston etc. You can be a laser physicist from NASA or a Brain surgeon or an engineer it doesnt matter YOU WILL GET YOUR FACE COMPLETELY RIPPED OFF. The market punishes those she loves. The pros eat the rookies every day. The market doesnt care about you or your family or your bank account. she is an equal opportunity bully that will take your money at a moments notice. More could be said but i think you get my point.
5. Success is NOT guaranteed.
You might fail and come to the conclusion that trading is not for you. Most traders never complete the above process because they dont have the mental or emotional aptitude for this business. simply put not everyone is cut out for this. You must come to this conclusion quickly or you will suffer total financial and emotional destruction.
However, if you are cut out for this then there are no easy shortcuts to becoming a successful trader. It will take 10 years ie 10,000 hours before you master your craft. I'm only speaking from experience and having blown up several accounts along the way.
I'm glad that I stuck in there and my love and passion for the markets is as strong as ever.
Be encouraged.
I don't know how to bold the text, but section 4 - second paragraph. That's the nail on the head.