Day Trading & Forex Forum

dannyegg4575

I've started trading at the beginning of this year. I followed all the rules all the recommendations from the books i've read. I was in the zone... so to speak.
At first, it was tough, I started out with $20000 in my account. That was wiped out.
Then, I borrowed $50000 to trade in my account. With that $50000, I was in a better position. I turned it into $320000 in a matter of months... Everything was going so well. I used the buy and hold mentality and never really put on any stops...
Only to see months of hard work, wiped out in two days.
I thought I could do it again by borrowing another $50000. Only to see that $50000 go down to $5000 as of today...
I don't know what to say really... This is a real tough game. I hope this go as a lesson for those of you who want to trade in this market. I don't know what to do now... My confidence is completely lost... Any suggestion would be appreciated...

I know it was stupid but what else can I do?

sigh...

Trader333

Two things:

1) Never borrow money to trade (in other words only trade with money you can afford to lose)

2) With this level of loss you cannot have had any concept of risk and money management and so I suggest that you learn about it before ever trading again.


Paul

Rhody Trader

For the sake of others that will read this thread, your first mistake was starting off with WAY too much money. No rookie has any business starting off that big. You're bound to lose when you get going until you get it sorted out. No need to put up that kind of money.

After that I'll agree with Paul. Never borrow to trade. And you were clearly trading much, much too big. To run an account up 6 fold in a matter of months implies playing positions way too large for your account. That's why you got wiped out quick.

To get your confidence back the only thing you can really do is start small and slow, and focus on making good trades with proper risk management.

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John Forman
Author - The Essentials of Trading

shadowninja

What they said.

Please tell me that money was a play account and not real money... $115k loss in a year, otherwise? I can't imagine what it must feel like losing $50k in a couple of days.

And always use stops!

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Paul71

Hi Paul.

This is just my personal opinion, but i don't agree with 1). I'm not saying it's for everyone, and what you have said is correct in that a person should not put the roof over their heads in jepordy. But borrowed money is the way to go, if not the only way to go, just as long as when it comes to paying it back (if you lose it) you have the angles covered. I can't afford to lose my own money, Paul, i can afford to lose somebody elses.

I respect your stance or view mate, i'm not arguing, i thought i'd just give a different perspective.

Sincerely.

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Rhody Trader

After posting my own thoughts about not trading borrowed, I sort of rethought the absolute nature of it. There are times when trading on borrowed funds can be justified. It is most certainly not the case when you are a newbie with no record of success.

Here's the question, though. Is it not true that when you lose someone else's money - borrowed money - it's effectively the same as losing your own, assuming you have to pay it back? Your net worth drops by that amount either way.

If you have to pay interest it's even worse.

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John Forman
Author - The Essentials of Trading

Trader333

I take your points and it is more a rule of thumb as I know of some who have lost everything by borrowing and then losing.


Paul

Paul71

I know what you're saying Rhody, i'm not saying newbies should go out and max up on credit. As for 'real' net worth, i don't really think it's at risk, as long as you go about it in a certain way. It's probably not wise to go into details, it's all a tad sinnister for some peoples pure thoughts, to say the least.

Are the markets pure as the driven snow?

Regards.

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