Prop Blowups, how common are they?

[NKNY]

I just want to add something about people blowing up because they were in the market with a large position and didn't take precautions....

IMHO, the only real precaution you can take is to not enter into a large position that could hurt you.

We can make up all the rules we want about using stop losses before heading to the restroom, doing your homework, proper entry and exits but we never talk about overall risk
to the account or portfolio.

Anytime you enter a single large "position" you risk the risk of ruin no matter what you do before during and after the trade.


Nick

 

[momo trader99]

MXX WOW 11k in a day.You are brain washed and have probably peanuts as balls.Let me try to explain in to you..if your looking to make a ton of p/l (yes p/l) look it up it profits NOT just rebates you could loose 10k easily in a day. I trade 5k goog/rimm/tzoo and so do all the guys around me.we can make in a day what sammy makes in a month, problem is your to stupid to see whats coming...whats coming you ask good question .Nasd is buying ISLD..THEN THERE WILL BE 2 and then kiss rebates goodbye.with no competion your DEAD.And its coming ..sammy and all rebates are getting slammed why because peter decided to hire more and more people tradingf the same way plus the market makers have picked up on what going on.with 2 ecn's soon and more people willing to work for 3-5 GROSS a month you will be dead soon.TAKE THAT TO THE BANK MNX



Quote from momo trader99:

WOW..the guy losses 1600 in a day...Problem with you swift pikers is that you think 1600 is BIG...thats why you guys take home 3-5 k a month if your good...real traders COULD loose 1600 in a tick but make what you make in a month in one hour..GROW up or start another thread



how about $11,000 in a trade, is that big enough for ya?
thing is, at swift you can't blow up cause you're not trading your own money...

mnx

 

[sdtrader]

Quote from momo trader99:

your to stupid

Always get a good laugh when people call others out and are TOO stupid to either proof read what they wrote while doing so or are TOO stupid to know any better.

Don't know what the deal is b/w you guys, but YOU'RE coming off as quite the ass.

 

[Pabst]

Quote from Cutten:

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.

I agree wholeheartedly with your first point. However to self righteously shit on people who were caught in the 1/2001 rate cut as "lazy" is ridiculous. If Greenspan dies to-morrow at noon and bonds break 4 handles before the news is even on the tape would I criticize someone for lacking the foresight to trade small knowing there's an aged Fed Chairman in office. Or how about bond locals who in one case lost 4 million on the Treasury's announcement to eliminate 30 year issuance? Yes trading one contract per 5-10k would eliminate the blow out potential. But don't misconstrue additional risk thresholds as systematic of being lazy or historically ignorant. The trader on this thread who lost seven figures on the 2001 rate cut is possibly the wealthiest guy here. Even though that was a big drawdown for him he's no idiot. I agree that index/fixed income traders should either UNDERTRADE or have stops IMMEDIATELY above/below there positions. A far away "safety" stop is useless in the type of cascading stop avalanche that an assassination or something of the like can bring.

 

[bandit]

April 3 or 4, 2000 was no doupt the best trading day ever. At the time, I was 5 to 7% of SUNW daily volume. Stock started that day at 100, went to 70, and back to 91 by the close.

Nasdaq went from 4300 to 3500 and back to 4000 by the close. Never seen anything like it sense.

Anybody else have that day as their best day?

Bandit

 

[Pumpanddump]

That was the day I lost $180,000 on a trade suspension!!!!!!!!!!!!!! All cash, no margin!!!!!!!!

 

[mnx]

Quote from momo trader99:

MXX WOW 11k in a day.You are brain washed and have probably peanuts as balls.Let me try to explain in to you..if your looking to make a ton of p/l (yes p/l) look it up it profits NOT just rebates you could loose 10k easily in a day. I trade 5k goog/rimm/tzoo and so do all the guys around me.we can make in a day what sammy makes in a month, problem is your to stupid to see whats coming...whats coming you ask good question .Nasd is buying ISLD..THEN THERE WILL BE 2 and then kiss rebates goodbye.with no competion your DEAD.And its coming ..sammy and all rebates are getting slammed why because peter decided to hire more and more people tradingf the same way plus the market makers have picked up on what going on.with 2 ecn's soon and more people willing to work for 3-5 GROSS a month you will be dead soon.TAKE THAT TO THE BANK MNX

YOU HAVE NO IDEA WHAT YOU"RE TALKING ABOUT!

that is so completely off topic. stick to the subject k?

mnx

 

[KnockoutCall]

I traded for a bulge-bracket firm on the sell-side. I'll never forget watching our fx traders taking a huge long in USD/JPY a day before LLoyd Bentsen uttered the infamous quote, "we favor a stronger yen"

Yen rallied 200 pips I believe. They were long 800mil USD/YEN iirc. Not a blowup, but heads rolled.

 

[nyc-hotshot]

The most I ever saw when I worked in a prop firm is one guy lost $280,000+ on one trade when he was short a bunch of it, the stock halted and then opened much higher.

 

[m22au]

Winter, the problem is that you have juxtaposed "realistic" next to "worst-case scenario". These two phrases are two different ideas.

Worst-case scenario is that the NDX / NQ goes to 0, so the worst-case scenario for a NQ long is about $28,340.

Realistic might be 10% of that or about $3,000.

Quote from winter:

Right, I understand and I'm not disagreeing with you or trying to be sarcastic (I hope it didnt come across that way). As you said, stops aren't foolproof, so what is a realistic worst-case scenario that one should use to make sure that they don't blow out their account for different trading vehicles like stops, futures, etc.