Just want to vent and hear some advice

[shadowninja]

Crikey, TWI. They are not nice endings. Now tell us an inspirational story!

Oh, I read Reminiscences... he sounded like he didn't really do much in the way of money management. Sure he could read the market and made millions but he also was bankrupt a couple of times.

 

[Paul71]

I know of two people who did similar things to you. One was not only with his own cash but also that of a number of his "good friends"..after 2 years of sending out false statements showing 30% per year returns he was found hanging in his trading room with a note explaining that he had lost it all.
The other one lived what appeared to be a very successful life with the nice house, cars, champagne and labels only to one day confess he was actually 1mln in debt that his wife had left him he was losing his house all the cars were on finance and he was an alcoholic. He is now a total wreck and unlikely to ever recover.

Some people are just not cut out for this game and if you do not have an extremely good self discipline then you have lost before you even start. All we ever hear about in the rags are the success stories. I know many professionals who made it by taking big positions and getting it right but who could just as easilly have got it wrong and never be heard about.

Sorry to hear your story. I hope you find a way to dig yourself out of the hole you are in. You are correct, this is a hard and unforgiving business and you have found that out in the hardest way.

Interesting post. Total denial going on here, couldn't admit the trade was wrong, and when it spiralled out of control, couldn't admit to their families. We can suffer from 'Cabin Fever', i wonder if there is such a thing called 'Market Fever'?

If trading with credit, never get the house involved, that's a nobrainer. As for 'cut out', sometimes it helps being a bloody hardnose b*stard.

When trading, imo, it's not just something on the side to waste away the hours, it becomes part of your life, and not just your life, it envelopes your family also. Everybody needs to understand the risks, at least the missus, no skeletons in the closet. 'Always trade with money you can afford to lose', i can't stand this quote, it's devious and cancerous and i think its a con. Trading is probably one of the most ruthless business' a person can undertake, unless you fancy genocide for a living. It's ruthless because on the face of it, it seems easy, and it is, but there are a hell of a lot of demons that need exercising first. So until you know your demons have been exercised, don't even go there.

Sorry about the rant.

 

[dannyegg4575]

So until you know your demons have been exercised, don't even go there.

Been trading for a year. I can't begin to tell you how true this is. it is the mentality that you are going to make it back and not pulling the trigger when necessary. It is you who are the sabotaging everything.

 

[foredog]

Cuts are very valid, but you must also remember to take a profit...$230k up.....lock that bad boy in. TESCO don't let you pay with share certs!

Greed is a ver y bad sin, how many people who would strugglde to spell FT bought stock in the dot com boom because a friend told them it'd double?

Thus stock did double, tipper took profits, friend decided he knew better..."it's gone up £1 in a day it's got further to go (no it's a crap website with no turnover!)"

Yep you're right it's now up £1.50...gonna take profit...no, it'll go up £2


STOCK SUSPENDED...liquidation........now you ain't got £2 in total let alone a massive turn.


take what you are given with gratitude.

 

[shadowninja]

Ah, yes, the dotcom bubble was a danger for many novice traders (myself included). The price can only go up, right? (Fortunately, for my major stocks, I did take the money when it was on the table.)

 

[RichieE]

I started out with $20000 in my account. That was wiped out.

First of all, I agree with the others about risk management and more importantly not to borrow money to trade. Just like going to a casino, only play with what you can afford to loose.

My thought is that with $20,000USD you could have joined an arcade's training program and asked for a seat in an experienced team where you could have learnt from others.

 

[Lothario]

are you wanting to still trade after such big losses? if so, what are you planning on doing as far as risk management is concerned? have you looked into RM yet since your beginning post?

 

[dannyegg4575]

I can't trade even if I want to. I will stand aside and watch the market. In a way it's good because the market's pretty crappy right now.
My problem right now is in not being able to pull the trigger in shorting. No matter how clear the signal is or how much I want to, i can't pull the trigger. Any experience trader have any insights in shorting they can share with me, with regards to psychology?
I am brainwashed since little in buying and holding and not shorting stocks because of "unlimited risks"... so i was told...
I can only trade on paper at the moment. I think i will sell my retirement mutual funds to cover some of the loan. What a waste...

Hope new investors can learn from this experience.

With regards to risk management, it's really hard to put on a specific stop. I notice very often that your stop gets hit quite often. Let me give you one of the very few examples. I remember buying GOOG when it was 708. I was right with GOOG. It climbed to 718. I placed a stop at 712. Right after I placed that stop, I watched the stock run down to 713 from 718. I quickly removed the stop and watched the stock climbed back up to 723 before the close. I saw on my Level quote as the price ticker moves closer and closer to my stop. it's not a fun scene.

I think that new investors such as myself only know how to buy and don't know how to sell. We have been brainwashed not to sell. we don't know when to sell when we make money and we don't know when to sell when we lose money. At the moment, I can only monitor closely from the side and place market orders on paper. i have no problem selling once i am wrong and lose $100-$200 each time. Hopefully, one day I can do it again.

Maybe i can start a journal on this website and have some experienced investors help me grow along the way by giving me insights? Just a thought...

I started rereading Trading for a Living, the very first book I ever read on investing. Everything I ever learned not to do in accordance to this book, I did in the last few months. Everything I was told not to do, I did. Mostly because I am too eager to make back some of the losses instead of starting anew.

 

[shadowninja]

Try a play/test account until you can consistently make money?

Also, read Trading In The Zone by Mark Douglas. All about psychology.

 

[RichieE]

Any experience trader have any insights in shorting they can share with me, with regards to psychology?

Danny, I am not claiming to be an 'experienced trader' but have you tried reading 'Trading in the Zone'by Mark Douglas? That book is quote good for psychology.

Maybe i can start a journal on this website and have some experienced investors help me grow along the way by giving me insights? Just a thought...

There is a section on this forum for journals. I'm sure that people will be willing to give their tuppence worth if you start writing one.

I started rereading Trading for a Living, the very first book I ever read on investing. Everything I ever learned not to do in accordance to this book, I did in the last few months. Everything I was told not to do, I did. Mostly because I am too eager to make back some of the losses instead of starting anew.

I took a hit today... it wasn't nice but I was told that the most important thing is to draw a line under it and NEVER to chase a loss... since it puts you under pressure and you are likely to make a bigger mess than when you started!

Just my thoughts... :|

 

[dannyegg4575]

Thanks RichieE,

I have already read Trading in the Zone. it's a very very good book. Unfortunately, it came to me at a very late time. Even if I did read it before the accident, I would've forgotten all about it. Just as i am looking at Trading in the Zone again. Everything is in black and white. The author said not to do, I did.

I think that self control is very important. Without a doubt.

there are lots of lessons to be learned. Most of the time, we don't take the time to learn it. Just as you tell yourself not to play with fire. Until you get burn, you won't know the full force of what fire can do to you.

 

[timsk]

Hi Danny,
An interesting thread, although I'm sorry to read your tale of woe. If it's any consolation to you, many of us here have been (and some are yet to be) in a similar dark place with our trading. I lost 70% of my account some years ago on a single trade (ERTS); something that, just before it happened, I gleefully told my wife could never happen because of my risk and money management skills. The thing was, on the fateful day in question, I somehow forgot those skills and I thought I was so good at this game that I could trade my way out of any that hole I'd dug for myself. For about 4 consecutive months up to that point, I'd been riding on the crest of a wave, thinking I knew it all and that the markets were to me what a well trained and obedient dog is to its master. Arrogant - moi? Never! It's taken me around four years to recover my confidence and, I hope, to learn from my spectacularly stupid and elementary mistakes (and lots of them), which will stand me in good stead in the future. Or so I hope. I've read more times than I care to remember that the best traders often start off by blowing their account at least once. I don't know if this is true or not - it doesn't really matter - but it's comforting to know that you and I are not alone and that it doesn't necessarily mean that we can't be good traders. Sorry for the double negative. I look at it much the same way as a reformed alcoholic views booze. Stay 'clean' one day at a time, one trade at a time and realise just how easy it is to be lured into what I call 'sloppy & cocky' trading patterns that can so quickly be our undoing. On the psychology front, I recommend you read anything you can by Brett Steenbarger - starting with the excellent articles posted right here on T2W in the Knowledge Lab'. Good luck!
Tim.

 

[dannyegg4575]

thanks timsk,

Your words are comforting. At this moment, I don't even know how to trade anymore... seems like everything I touch, went down hill...

 

[new_trader]

First of all, I agree with the others about risk management and more importantly not to borrow money to trade. Just like going to a casino, only play with what you can afford to loose.

My thought is that with $20,000USD you could have joined an arcade's training program and asked for a seat in an experienced team where you could have learnt from others.

Very sensible. Don't borrow money to trade. If you can't afford to trade then you certainly can't afford to lose. Borrow some brains instead and do something else.

 

[Paul71]

Very sensible. Don't borrow money to trade. If you can't afford to trade then you certainly can't afford to lose. Borrow some brains instead and do something else.

The business! Is trading a business, NT? You're obviously a business man who put's everything on the line, because of a cliche. Good luck NT, you'll need it.

 

[shadowninja]

Many people start out not treating it like a business. Even if though beginners say they take it seriously, it is no better than a Saturday morning in the local bookmakers placing flutter on She Cooks Well because the horse has 4 legs and a jockey that wears a nice combination of blue and white. Should a punter in the local bookmakers with stars in his/her eyes take out a loan to make a few punts?

 

[Paul71]

Many people start out not treating it like a business. Even if though beginners say they take it seriously, it is no better than a Saturday morning in the local bookmakers placing flutter on She Cooks Well because the horse has 4 legs and a jockey that wears a nice combination of blue and white. Should a punter in the local bookmakers with stars in his/her eyes take out a loan to make a few punts?

I'm not going there SN. I can't be bothered. Survival of the fittest, you either make trading work, or you don't. There's no inbetween.

Good trading SN.

 

[dbphoenix]

If you followed all the rules, if you were "in the zone", and if you understand risk management, how did you manage to lose 115,000?

 

[Paul71]

Why would anyone trade with their own money, especially if the individual knows they can trade? It doesn't matter who's bloody money it is. The underlying psychology of the 'no to credit' brigade is what?

Anyone on this thread who has posted against credit/loans/debt, should not be advising people on a chat site for traders, imho.

I think it shows a deep running vein of insecurity in their own abilities. Maybe trading IS one big gamble for these people?

Trader 333, Paul, you are my exception in this post, i understand what you were saying.

 

[Rhody Trader]

Why would anyone trade with their own money, especially if the individual knows they can trade?

It's that last bit that's the catch. If you've just started trading and blew up your initial 20k account, should you be borrowing 50k? I think at that point it's pretty fair to say the "knows they can trade" part must come into serious question.