Prop Blowups, how common are they?

[FaderTrader]

It's not so much about blowing up as burning out. Today's prop firms are terrified of risk, so it's very rare a trader is going to blow his account on one trade - let alone turn the firm negative. That's not to say it's impossible.

What's more often the case is the guy who puts up 5-10k and then losses 300-500 dollars a day for a several months, with a few up days for good measure to keep the dream going, and then just dissapears one day.

 

[FaderTrader]

Quote from Pumpanddump:

I know a guy who lost $180,000 on a trade suspension. The stock got suspensed. It was around $20 when it was suspended. The guy had 8,000 shares. When they resumed trading it opened at .25 cents. This is a real story - beleive it or not, I am dead serious!!!! No BS.

Ok - what stock and what day? Thanks.

 

[TrueRange]

I heard one this weekend from another trader whom I went to high school with.

Guy retires from wall st with 10 million...young guy...successful trader. Decides to trade his own money from home.


He`s down to 200k......

Nobody is safe from inner demons.

 

[coolweb]

Quote from TrueRange:

I heard one this weekend from another trader whom I went to high school with.

Guy retires from wall st with 10 million...young guy...successful trader. Decides to trade his own money from home.


He`s down to 200k......

Nobody is safe from inner demons.

hahaha

what a loser

 

[Aardvark]

Quote from TrueRange:

I heard one this weekend from another trader whom I went to high school with.

Guy retires from wall st with 10 million...young guy...successful trader. Decides to trade his own money from home.


He`s down to 200k......

Nobody is safe from inner demons.

I'm sorry but I just totally DON'T believe that. Its as if we are watching the gladiators with the thumbs up or down. No one is stupid enough to lose 10mil. 1 mil yessss but 10...noooooo

 

[Steve Tvardek]

Couldnt be THAT good of a trader

Quote from TrueRange:

I heard one this weekend from another trader whom I went to high school with.

Guy retires from wall st with 10 million...young guy...successful trader. Decides to trade his own money from home.


He`s down to 200k......

Nobody is safe from inner demons.

 

[jasmine1]

1st day Jan dropped 20K buying, second day Jan (rate cut) dropped 20K in a short. That was a great way to start the year.

dropped 60K @ the open after 9-11.

dropped 78K on a long when the markets used to listen to Aljazeerawhatever news in about 20 seconds.

 

[Daal]

I once dropped my wallet on my way to the market. I endup down $25 that day

 

[drukes1234]

I know this thread hasn't been posted on in a while but I'm starting to trade heavy, heavy size on futures and this post is scaring the shit out of me. I wasn't trading at the time but why in the hell did the fed cut rates on a non-fed meeting day?

 

[Alchemist]

Drukes,

There is a good chance that it will happen again, and maybe fairly soon at that, meaning in the next year.

The Fed (at least under Greenspan) tends to overshoot interest rates and then panic lower them. The surprise inter-meeting aspect just juices things further...

I got caught short TWICE by that, in 2001 and back in the 90s: I think it was 94... not sure of the exact time... I was swing trading, and didn't get killed too badly, but ugh, it left a bad taste... I believe there was also a surprise cut in 98 that somehow I missed.

In 2001 it was: oh crap, not this again...

I really don't want to go through with that again, and definitely not with the size I trade now. However, the reality of trading is that an external news shock can occur at any time, and we may be on the wrong side of it. It seems like a good time to brush up our disaster plans.