I didn't post any story relaing to anyone. So, if I offended you, I am sorry. I just wanted this to be a thread to learn. Later bro!!
Prop Blowups, how common are they?
- Thread starter Pumpanddump
- Start date
Very intersting results from the poll. It seems very split right now but it is clear that from the posters, about %75 of the people out there have seen someone blowup.
how bout a 40million blowup day. Ooops, no that's a regular day, my bad.
Who cares? Of course blowups happen, they happen everytime there is a shock in someone's portfolio or in the general market.
it's not cause you forgot your stop loss or what not; hah. That'd be a newb of the newbie type of blowup, overleveraged and unipositioned.
Who cares? Of course blowups happen, they happen everytime there is a shock in someone's portfolio or in the general market.
it's not cause you forgot your stop loss or what not; hah. That'd be a newb of the newbie type of blowup, overleveraged and unipositioned.
Most great traders blow out at least 1x. We learn from our mistakes and thats just the way it goes. We also learn from what we see/hear. I have seen many blow out from problems in their life(health/women etc). What i find is that they go into DONT CARE MODE "whats another 50k" which is a big mistake. I saw one trader very young and doing very well have 1 stock halt and 1 days goes by 2 days goes by, and then poof(stock got killed). So luck has its part also.Allways be humble(or the market will humble you). Here you go this is what they dont do when they blow up.
1/ Dont care(dont do their homework)
2/ Big ego(they are the best and know everything)
3/No rules(no good reason for making a trade)
4/Angry trader(i look for them in my stock they take offer then smash bid giving away their money)
5/They 2x their bet instead of cutting it back on a slide/tilt( Gambler)
1/ Dont care(dont do their homework)
2/ Big ego(they are the best and know everything)
3/No rules(no good reason for making a trade)
4/Angry trader(i look for them in my stock they take offer then smash bid giving away their money)
5/They 2x their bet instead of cutting it back on a slide/tilt( Gambler)
I think the "don't care" is the biggest mistake.
I believe this mentality occurs due to relative losses.
For instance one day you lose $10K, the next day you're down $50K and panicking. The following day you're down $25K and thinking.. "well at least it wasn't as bad as yesterday".. then you either hit a "emotional bottom" and get back into disciplined trading or you basically lose it all.
I believe this mentality occurs due to relative losses.
For instance one day you lose $10K, the next day you're down $50K and panicking. The following day you're down $25K and thinking.. "well at least it wasn't as bad as yesterday".. then you either hit a "emotional bottom" and get back into disciplined trading or you basically lose it all.
IMO the main reason most traders blow up is they focus on their entry price and how much they have lost, instead of thinking of themselves as being flat and asking would they get in at the current market price with such a large position. 99% of people who average down in the hope of getting out at breakeven would never take that size position if they had been flat at that point. The second reason is that they are lazy and don't research market history, and therefore don't understand risk. A good example is the early 2001 intermeeting rate cut - Greenspan had already done this in the late 90s with similarly spectacular results, so there was no excuse for not anticipating the possibility during the fear-driven environment in 2001.