Best Thread £10k wipeout

[millsy500]

I'm down, rock bottom.

started trading Crude Oil futures, though it was easy money at first. made a bit. then I got greedy and didn't use stops. went short and I wasn't willing to take any loss so let the trade run for 7 days, the loss got bigger and bigger so then I entered another short hoping to raise my breakeven. then the biggest rise since the gulf war took me out of the game.

I own double what was in my account and my losses are shocking bad probably £10,000 in total. don't think I can come back to trading, I feel emotionally scarred.

my wife found out about my losses and has threatened to leave me. I hate myself

I've been there too my friend, the bad news is just when you think you can't get any lower or worse , Whack, theres another one.... then you might just turn the corner.....

 

[advfntrader]

well not sure what I would do if she had gambled it away, which is actually what I've done. gambled as I had no real risk management or wise investment plan.

I think that trading is a single persons game unless your partner agrees with it and is aware of it. otherwise you are just asking for trouble one day.....

hopefully I can get through this but its not easy I'll tell you. most women don't want the fast life, they just want security. trading is inherently risky.

the main issue she has is she keeps thinking of the missing money - "think what we could have bought with that" etc. the resentment may be there for years. I keep thinking the only way to cure it is to get hte money back but that could lead to an even bigger disaster !!

 

[beebop]

On a more serious note, this thread should be madatory reading for all newbies registering on this site !!!

Chorlton

Yep, I agree with this.....

I'd live in a cardboard box with my other half but it can cause a strain even in the best of relationships! Not knowing would have been something that would cause me difficulties.

Don't go chasing the losses. Feeling under pressure to make that money back will not help the trading and any further losses will compound the situation.

 

[aquamarina]

Quote from "Think and Grow Rich" - "Before success comes in any man's life, he is sure to meet with much temporary defeat, and perhaps, some failure. When defeat overtakes a man, the easiest and most logical thing to do is to QUIT. That is exactly what the majority of men do".

This is not to say, go on, continue... This is to say that if you feel strongly about trading, you do not have to quit it. Paper trade it, find a system that works for you, fine tune it, backtest it, read, learn, read more. Money management, stop losses, learn to trade your system, not your emotions. Learn from your mistakes. Keep a journal of your mistakes! If you keep losing in your demo account, do not start trading. When you feel you are ready to start, start small, trade minimum lots... Go back to paper trading if you start loosing again.

I know a couple of people who had massive losses and almost got out of the game, but picked themselves up and are now making good money trading. I read the other day Naked Trader website, he apparetnly lost £7k at some stage in the beginning and almost quit, but by looking at his site how he is making good money from trading...

 

[advfntrader]

good advice aqua, I will continue to read and learn on these forums. I still have a demo account. I will STAY out of commodites as they are way too volatile and require too much margin. start small and control it. maybe in a year or so I will re-enter with a very small amount. I just got ahead of myself

 

[donone]

Elder says that "learning to trade will cost you as much as a good college degree" - Well that's a Term or so paid for.

An accountant won the World Series of Poker a couple of years ago ($65million I think) - His wife had said he could have $1000 out of "Their" money to learn to play Poker.

That wasn't enough & he became known as "Fossil man" because he sold his collection of fossils a few at a time to finance his craving.

The danger with a Security obsessed woman is that when she knows you have made a few quid - she'll want you to "put it somewhere safe - so you don't lose it again" & with her "Thinking" - you're guilt bound to comply.

You need perhaps to absolutely promise her 100% that you'll never use "Joint money" again without her agreement.

A friend of mine has such a woman - & he "gives her" all their "joint money" to use for "Security".

He has a lock up garage which she doesn't know about & uses it to store antique furniture which he renovates & sells for "His money" - which he uses to fund new purchases etc.

There are many ways to make extra income - (even Overtime or humble gardening perhaps?)

Perhaps you could think along these lines & in the fullness of time (you sound fairly Young) - you can use this money for trading & perhaps even pay back the 10k - into "joint money"

Historically Almost all of the "Great Traders" got wiped out a number of times when they started.

Your own Self esteem relies on you refusing (inside your head if neccesary ) to allow her to use this incident to control you for ever.

 

[wildkactus]

ADV, Sorry to hear, Hope all gets better on the home front.
A good wakeup to me about the down sides to trading,

Something that I do after a Loss(es) is to take a market time out, no trading no market anything, this can be 1 day to 1 week depends on the loss(es), then I restart by going over the trade to see what happen, even get someone else to look at it for me, then I start to paper trade then small trades untill I get myself mentally back.

All the best for the future, hope you don't give up, as this can be a good business to be in.
just get back into it slowly, you will get there.

 

[Chorlton]

good advice aqua, I will continue to read and learn on these forums. I still have a demo account. I will STAY out of commodites as they are way too volatile and require too much margin. start small and control it. maybe in a year or so I will re-enter with a very small amount. I just got ahead of myself

Hello Advfn,

I like to offer some advice if I may.

Ask yourself whether you really have an interest in the Mrkts. By interest I refer to something other than just "wanting to make money". If its the latter, then look for someone to trade for you and take up another interest.

If, on the otherhand, you do have an interest then I would suggest you take the following steps:

1) Sit down, look at yourself carefully and decide what YOU want from the Mrkts. I'll get you started:

1.1 Do you want to trade everyday, less regularly (such as weekly), etc?
1.2 What level of risk are you confortable with?
1.3 What type of trading interests you? TA, Fundamental, etc
1.4 Are you a emotional person? This helps to decide whether you are better looking at a clearly defined mechanical system or one with some discretional element.

2) Once you have completed the above and made a list, you should then have a clearer idea as to where to get started.

Read some books (most contain the same old information presented in a different manner) but there are some "key" books out there which IMO are vital to have on your bookshelf. There's plenty of threads on here which highlight these books.

3) Study and understand Risk & Money Management. This is a dry subject compared to the other aspects of trading but IMO this is the one area which can really improve ones profit line.

4) If you decide to focus on TA as your main tool for trading, then please try to resist the urge to go off in search for the "Ultimate Indicator". There is no such Holy Grail!!! Instead try to focus on WHY price really moves and simple TA concepts such as Support & Resistance. Indicators do have there place but not for newbies IMO.

Trading is a rewarding profession both financially AND mentally but like any other profession takes time to become skilled at it. Due to the time involved it is vital that you have a real interest in it............

Hope this helps & Good Luck,

Chorlton

 

[advfntrader]

my sole goal to trade was to make some money. I have a full time job so can't screen watch all day so I guess thats why I failed, not enough effort went into it. should have just stuck the money in a fund instead

I am under 30 yrs old so I guess I'm still fairly young and have many years to learn, I'll put this down to a mistake when learning lifes lessons. you get nothing in life without hard word.

 

[Hoggums]

my sole goal to trade was to make some money. I have a full time job so can't screen watch all day so I guess thats why I failed, not enough effort went into it. should have just stuck the money in a fund instead

I am under 30 yrs old so I guess I'm still fairly young and have many years to learn, I'll put this down to a mistake when learning lifes lessons. you get nothing in life without hard word.

If you ever do become successful at trading then this will be the best £10,000 you ever spent. Put it down to the cost of learning to trade - you've probably taken away far more valuable experience than any stanzione or Winters course could ever give you.

 

[advfntrader]

and today OIL tanks.... :-(

 

[zigglewigler]

my sole goal to trade was to make some money. I have a full time job so can't screen watch all day so I guess thats why I failed, not enough effort went into it. should have just stuck the money in a fund instead

I am under 30 yrs old so I guess I'm still fairly young and have many years to learn, I'll put this down to a mistake when learning lifes lessons. you get nothing in life without hard word.

You wanted to make some easy money because you're greedy and lazy. Like every bloke on the street. We all started there.

Now you hate yourself and are consumed by fear, what will the market 'do' to you next? Again, the normal useless brain we all have when starting out.

You need to get £10k of value back out, look at your thinking or lack of it before, during and after the trade. The TA part is easy, the psychology isn't.

Forget about the shoes your wife would've been really pleased with, you entered this with the best intentions, to improve the quality of life for both of you. (I assume.)

If you are serious, and I mean prepared to commit more time and effort than most do measuring their living room for giant tv options, then get your head stuck back in.

It takes years to be any good. Easy money doesn't exist despite what the mass media might think. The market feeds off of idiots. You've just had one of the best lessons, a painful one.

In my early days I once lost a third of my account inside of two minutes. I realized I had to up my game. It was a feeling I will never forget, and I'm glad I had that experience.

Don't take your loss personally. It's ok to be an idiot.:smart:

 

[fibonelli]

Message to moderators: Could you kindly consider whether there are any merits to pin this thread as required reading for all newbie traders.

The reason being is that if a newbie reads this pinned thread, then it is likely that it can help newbies from making the same trading (ie risk management) mistakes as advfntrader did.

advfntrader: thank you sharing your experiences with us.

 

[Jaydee]

Hi ADVFN

I'm sorry to hear about your loss and hope you don't beat yourself up too much over this. You would be surprised how common his type of behaviour is when learning to trade. It's a harsh lesson, but a lesson nonetheless and it may have saved you from losing more in the future.

I can't offer any better advice than that which has already been posted but, what I will say is that I don't think you should give up trading. Why? Because then that 10K was lost for nothing and you've learnt the most important points of strategy, money management and emotional control all in one.

You can trade on Finspreads for 50p per point, commodities, indices, whatever. Choose something where its volatility suits you. Set your account up with a small amount, let's say £1000 (if possible, this bit is up to you) and make sure you don't risk more than 1% of it in any single trade that you do. Just so you know, risking more than 3.5% of your account equity per trade can result in 100% drawdown in the event of a long run of bad trades. Keep this in mind.

Take some time off trading, have a period of reflection, go over that trade (frame it on your wall if necessary) again and again, learn from it, size down, start trading again with a plan and never give up...

Best

JD

 

[2be]

Sorry Advfntrader to hear about your sharp turn in trading. However feeling sorry will not accomplish much. Trading in many ways is a journey of discovery, one discovers markets just as much as one discovers him/herself, what I mean is the discovery of things like badly based hope, pain and pleasure, pain barrier, learning to to without emotion what naturally is emotional and so on.
If you find markets and trading interesting, you will find the way to integrade trading into your busy day. If your main reason to trade is to get the 1st million by September, or to take revange on the market for the lost amount, you most likekely will end up with bigger injury, which I hope is not the case. There has been a lot of very good advise posted already. Stopping after paying the first instalment on the way to become a trader is probably not the best idea, that is if you know deep down that trading is something that interest you and trading is something you really want to do. There are a lot of people that would not risk any resourses, just in case things would not workout for them. They are perfectly fine and happy individuals and very valuable members of society. There also are those like you, the other traders and me who are preparred to take some risks, knowing well that there also are some rewards. We would not take all and every possible risks, or manufacture one, just to get more excitement. I would not choose to jump from an aeroplene without a parachute, hoping to land on a large heystuck, however exciting it might sound, would you? Yet when one comes to the market and places trades without careful preparation and some serious research, one is exposed to do a real damage to him/herself and to the account. Yet, the very fact that so many traders have experienced these "puryfying" losses is a testimony in itself that there are many haystucks around. I know for sure that if my risk avertion was extremly high I would not have done many profitable things in my life. When I look back I am pleased I have taken many risks, I still do not like the loosers, but without the loosers I most probably would not have the gainers, for that is the kind of person I am. I can assure you that I have not enjoyed any of these loosers, especially at the time of their happening, and some of them have been very substantial. One has to put it behind and go farward, treasuring the learned lesson/s without bitterness, assuring the next step will be done in a disciplined and a wise way. Taking some time to study the market and your own reactions, demo or small lot trading will not be a lost of time and apportunities, indeed it most likekly will make you consider things, which otherwise would have been undedected and undiscoverred, including all the positive sides of becoming a profitable trader. Preferably your wife also needs to be involved or at the very least be aware of your intentions to explore trading as otherwise what would have been enjoyable might become devisive, and that is no good at all.
I wish both of you the very best,
2be

 

[temptrader]

my take and no offence intended

I always wonder about gamblers and what actually makes them stay in the game so much. I mean, to the outside (the general public) and people posting on bulletin boards, it just seems that these people don't know what it is that they are doing and yet, for the love of GOD, STILL do it.

My only real conclusion is this: in their minds, and their ways of thinking, they are right, it is possible and and losses and losing runs are just temporary or just part of the game.

I know of a gambler who has tried 4 times now (last time with a 25K loan he got from the bank - don't anyone do this please). He made about 60% of that loan in his first 3 weeks (he plays the horses on betfair backing or laying, he does not trade on betfair). It took him 6 weeks to get wiped out!! When I looked at how he played and what it is that he did he got really defensive about it, but end analysis was that he played probabilistically (which by the way is the only thing you can do with the horses), and he used martingale staking to try and turn a bad day into a good day. This worked 95% of the time, it was only the 5% that had devastating effects.

The problem with playing with probabilistic systems (or seeing something as probabilistic), is that there is no such thing as "certainty". Hence something you see as certain to happen because of this and this and that, might just happen because it was "likely" to happen, not because it was certain to happen. Because that's how you view it.

Your reply, 2be, is typical of all gamblers who still stay in the "hobby" stage and who continually lose money all the time they try, because to their mind they could do it. It never occurred to them that they couldn't do it because that means accepting defeat.

Notice I said gamblers because I am specifically talking about horse racing (where you cannot take out probabilistic effects). I really don't know of any successful tipsters or gamblers making a lot (apart from a handful and even they have losing runs). It seems that the entire horse racing industry is filled literally with people who think they could do it, and when they do it does not amount to much.

Trading is different and can be played differently. But alas, very few can do that, and knowing how it can be done so does not guaranteed success in doing it like that.

 

[2be]

I always wonder about gamblers and what actually makes them stay in the game so much. I mean, to the outside (the general public) and people posting on bulletin boards, it just seems that these people don't know what it is that they are doing and yet, for the love of GOD, STILL do it.

My only real conclusion is this: in their minds, and their ways of thinking, they are right, it is possible and and losses and losing runs are just temporary or just part of the game.

I know of a gambler who has tried 4 times now (last time with a 25K loan he got from the bank - don't anyone do this please). He made about 60% of that loan in his first 3 weeks (he plays the horses on betfair backing or laying, he does not trade on betfair). It took him 6 weeks to get wiped out!! When I looked at how he played and what it is that he did he got really defensive about it, but end analysis was that he played probabilistically (which by the way is the only thing you can do with the horses), and he used martingale staking to try and turn a bad day into a good day. This worked 95% of the time, it was only the 5% that had devastating effects.

The problem with playing with probabilistic systems (or seeing something as probabilistic), is that there is no such thing as "certainty". Hence something you see as certain to happen because of this and this and that, might just happen because it was "likely" to happen, not because it was certain to happen. Because that's how you view it.

Your reply, 2be, is typical of all gamblers who still stay in the "hobby" stage and who continually lose money all the time they try, because to their mind they could do it. It never occurred to them that they couldn't do it because that means accepting defeat.

Notice I said gamblers because I am specifically talking about horse racing (where you cannot take out probabilistic effects). I really don't know of any successful tipsters or gamblers making a lot (apart from a handful and even they have losing runs). It seems that the entire horse racing industry is filled literally with people who think they could do it, and when they do it does not amount to much.

Trading is different and can be played differently. But alas, very few can do that, and knowing how it can be done so does not guaranteed success in doing it like that.

Hi Temptrader,
I am sorry if I have offended you and I am very surprised that you think I am a typical gumbler. For very serious reasons I can assure you I am not a gumbler, do not know that much about gumbling, so I cannot elaborate on it in any way, not even on horses. Please do not confuse taking risk with gumbling, and if one is not ready to take any risks one probably would not be able to trade.
This thread is not about gumblig, it is about advfntrader loosing what is to him a substantial amount of money, because of not being experienced enough in trading and risk control. Many tradres have started in a similar way, some of whom I know personaly. To be a profitable trader one has to start somewhere, one has to learn. Lost trades have tought many traders, myself included, very valuable lessons. It is with discipline and experience that one is able to keep the looses small, and allows profits to grow.
Advfntrader, sorry for that little diversion into gumbling territory, I hope that you will be able to discern the difference between gumbling and trading, allowing you to become a disciplinned and profitable trader. It is so easy to blame other things in order to place on them the responsibility for our mistakes. Markets are so quick to square us on this, yes we do make mistakes, but experience and discipline makes us to act quickly in correcting them, so that we can keep the looses small. Stopped trade very rarely is a mistake, mistake is when one trades against the selfestablished plan, strategy and rules. Mistake is a luck of selfcontroll, luck of discipline and an attitude which prevents one to treat trading in a professional way.
My best wishes to all,
2be

 

[temptrader]

Hi Temptrader,
I am sorry if I have offended you and I am very surprised that you think I am a typical gumbler. For very serious reasons I can assure you I am not a gumbler, do not know that much about gumbling, so I cannot elaborate on it in any way, not even on horses. Please do not confuse taking risk with gumbling, and if one is not ready to take any risks one probably would not be able to trade.
This thread is not about gumblig, it is about advfntrader loosing what is to him a substantial amount of money, because of not being experienced enough in trading and risk control. Many tradres have started in a similar way, some of whom I know personaly. To be a profitable trader one has to start somewhere, one has to learn. Lost trades have tought many traders, myself included, very valuable lessons. It is with discipline and experience that one is able to keep the looses small, and allows profits to grow.
Advfntrader, sorry for that little diversion into gumbling territory, I hope that you will be able to discern the difference between gumbling and trading, allowing you to become a disciplinned and profitable trader. It is so easy to blame other things in order to place on them the responsibility for our mistakes. Markets are so quick to square us on this, yes we do make mistakes, but experience and discipline makes us to act quickly in correcting them, so that we can keep the looses small. Stopped trade very rarely is a mistake, mistake is when one trades against the selfestablished plan, strategy and rules. Mistake is a luck of selfcontroll, luck of discipline and an attitude which prevents one to treat trading in a professional way.
My best wishes to all,
2be

Hello 2be,

I'm merely drawing attention to the fact that allowing for losing runs and having the odd account getting wiped out is not enough.

I am sure you mean well and have good words of encouragement, but I was merely giving an example of gamblers (those that mainly play with horses) as an illustration of persistence for a futile goal - a goal attained by an absolute few, and even then the rewards are not worth it. And yet a lot of people poison themselves trying to attain something that very few can attain. In gambling (horse racing) it worse since losing runs are part and parcel of the game you have to get through . . .

From what I know of people blowing their accounts, it's usually because they played "brainlessly". When they are earning good money on a nice winning streak, they relax and think it's easy, and that's when things start to go wrong. They become mechanical in the way they do things and think the game is easy, and thus let their guard down.

Sometimes, it's simple because what they are doing is mechanical and they just happened to have a winning streak and it was only a question of time when their accounts would get wiped out.

And because the two above scenarios are viewed from a probabilistic perspective, it's is incredibly hard to separate what happened because it just by chance happened, and what happened because they knew it was going to happen due to thinking right.

 

[advfntrader]

I'm been thinking about the difference between gambling and trading a lot. My wife thinks I have gambled the money away as I didn't buy anything for it. In a way she is right, spreadBETTING kind of gives a clue, trading is actually gambling IMHO, BUT if you are disciplied and control the RISK then its different.

I had no real mechanical system, no rules and didn't control risk. hence I feel I was gambling. if I return to trading this will NEVER happen again and I will stick to a system 100%

 

[Chorlton]

I had no real mechanical system, no rules and didn't control risk. hence I feel I was gambling. if I return to trading this will NEVER happen again and I will stick to a system 100%

and.... Here endeth the lesson !!!!!!!!

Advfn,

I think your maturity towards trading has improved 100% since your first post.... Keep it up !! :cheesy:

Regards,

Chorlton