To get deeper into this story we would have to go there in the summer of 2016. About 5 years ago.
At that time I was operating with a positive correlation strategy between the euro dollar and the gbpusd or spread trading.
So the strategy here was to take advantage of when those assets were uncorrelated by buying the asset that was cheaper and selling the most expensive asset, taking into account that in a high percentage of times those assets are going to be rejoined.
all very well right? wonderful, the strategy of the century.
The problem was that this correlation was not perfect and this strategy itself had to be carried out with a very strict risk management since the strategy did not use a stop loss, so you can imagine.
But I was a good idiot and a novice at last, well I skipped that careful rule of managing risk .. And well, they will be thinking fuck this does not look good and yes they are right but wait this is not the worst, now let's see the real shit.
When you do de-correlation trading, the first thing is that you have to do a lot of backtesting and analyze many points such as the shar ratio, the mean, etc. And do you think I did all that?
Well noooo.
To trade with this strategy, which is quite complex, I only looked at an indicator called overlay chart. An indicator that painted everything very pretty but it was all a falsehood.
What happens then that when I started I had a couple of good operations that were merely luck. And I believed myself to be the Superman of trading, nooo nooo shitty Superman, I believed myself to be the God of trading.
I really said now if Warren Buffet and company hang on because I'm going to make a fool of them. I am going to earn $ 15,000 in 4 minutes as well as sell the fumes that there are today and to whom you pay a $ 3000 course . Fuck I think it happened to me a little hahaha but let's stop sarcasm then. and let's continue in our business
As I was telling you, I believed the GOD of trading so I started looking for capital like crazy gentlemen, and well I had my cousin Eliezer who was always supporting me, he entered him with a good dough, he had a physics professor at the university named Aldo He also said you know that you are the master of trading so he also entered with a good capital and finally there were my parents, gentlemen, here we are going to make a parenthesis gentlemen because here is the sad part of the case,
(My parents had no money saved to invest so believing in me, trusting me that I believed the GOD OF TRADING because they decide to take a loan at the bank. If you listened correctly, gentlemen, a loan).
My father was 100% with this but my mother already knows how a good woman you had your doubts and she told me you know what we will do, boy, but she did not trust this so I just tell them (my father and me)
And well, nothing not to tell you so long one day I do not remember well what the hell happened but there was a news that totally knocked out the pound I think it was the referendum referendum on the membership of the United Kingdom to the European Union (Brexit) or I do not remember well but the point was that that sent the pound to the ground, and as you can imagine, here his napkin had a purchase in the gbp usd, and sale in the eurusd, you will say hey guey but the euro usd and the pound were coordinated, the euro Surely the pound followed, and well no gentlemen, instead of falling the fucking euro began to rise like a rocket gentlemen and the good idiot of his napkin instead of taking action and cutting losses that were already very large by the way he told the dick guey, this is going to improve and I already went to sleep.
When I get up at 6 in the morning, because you already know what happened, the accounts did not hold and I received the margin call, I lost everything, gentlemen.
when I saw that I felt a big lump in my throat, I couldn't speak ...
I remember spending the whole day locked in my room.
I saw the messages from Eliezer and Aldo telling me hey gueyy I see the empty account what happened ??? nooo I had a lot of words to say to you so I told you guys sorry, I'm really sorry, but I've lost everything. Some days passed and the most difficult thing was still missing, to tell my Father,
I think it was 4 days after the bankruptcy of the accounts. I needed to vent so it was around 8 o'clock at night where a friend named Joel, I remember we sat down to talk in the living room of his house and he asked me hey man, are you pale, what the hell is wrong with you? I told him guey I just loaded 3 trading accounts and one of them was a loan from my parents. my friend looked at me and said fuckrrrrrrrr # @ #!% # but what have you done ??
We talked and talked and at the end of the conversation he told me you have to tell your stupid father because, although that will be hard, it is killing you inside. I said, you know you're right, so that same night I called my father at the marquee (garage) and told him with a totally lost look, Dad, I have bankrupt the account, we lost everything. my father turned pale, put his hand to his head and said: is there my GOD and now what will I say to your mother ??? that guys! I break my heart the 1,000 pieces.
is that imagine a # @ #!% # with just 21 years going through this situation for not having the # @ #!% # head in place, that's what trading was giving me at that time sticks and sticks. .
The amazing thing was that my parents took things in a very mature way and told me. did you know? nothing happens, life has to go on. we will pay the loan and voila! That is one more life experience! That was brutal, gentlemen, they told me, calm down, we support you, go ahead and well that same year a few months later I got a job in a bank and the greatest satisfaction I had is that later I was finally able to return all the money that my parents had paid on the loan. Sirs.
and well that's my story, it should be remembered that this was a before and after for miii! From that point on, every time he had a trading strategy, he did 8,000 back tests guys. I tested it, I put it upside down and most importantly. after that point I learned how to do low risk trading gentlemen.
Since that day I have not done leveraged trading.
and nothing I hope you liked this experience! I know that there will be many identified with this because in the markets almost everyone begins by breaking their account.
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