Best Thread £10k wipeout

[zigglewigler]

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%

Oh...you really are out of your depth.

Difference between gambling and trading? SpeadBETTING doesn't give you a clue. SpreadBETTING has nothing to do with trading. Spreadbets are a moronic product.

If you place a spreadbet you are being positioned against other spreadbet clients, in the same way sports betters are made part of the over-round, they are not in the game, spreadbetters are not in the market, only traders taking positions in futures, stocks or any other derivative, are in the market.

If you are not in the market, you are not trading. The clue is in the word 'trading'. Be it futures contracts, QQQ's, fish, vintage mobile phones, whatever.

'Trading is actually gambling IMHO'! You should lose any opinion you have about the markets, fast! Your opinion to date has cost you dear.

Anyone going into business, any business, without proper practice is a gambler. Why would you believe that the financial markets are less of a deadly serious business than any other?

Despite your protestations you still have a gambler's head; discipline, risk control, rules, 100% mechanical systems, blah blah, these things are just a sticking plaster for your psychology.

Spreadbet firms are going to do well out of you. Unfortunately.

 

[temptrader]

Oh...you really are out of your depth.

Difference between gambling and trading? SpeadBETTING doesn't give you a clue. SpreadBETTING has nothing to do with trading. Spreadbets are a moronic product.

If you place a spreadbet you are being positioned against other spreadbet clients, in the same way sports betters are made part of the over-round, they are not in the game, spreadbetters are not in the market, only traders taking positions in futures, stocks or any other derivative, are in the market.

If you are not in the market, you are not trading. The clue is in the word 'trading'. Be it futures contracts, QQQ's, fish, vintage mobile phones, whatever.

'Trading is actually gambling IMHO'! You should lose any opinion you have about the markets, fast! Your opinion to date has cost you dear.

Anyone going into business, any business, without proper practice is a gambler. Why would you believe that the financial markets are less of a deadly serious business than any other?

Despite your protestations you still have a gambler's head; discipline, risk control, rules, 100% mechanical systems, blah blah, these things are just a sticking plaster for your psychology.

Spreadbet firms are going to do well out of you. Unfortunately.

I was trying to steer the thread to reach this point but you said it for me.

"discipline, risk control, rules, 100% mechanical systems" will get you wiped out in the long run.

 

[neil]

I was trying to steer the thread to reach this point but you said it for me.

"discipline, risk control, rules, 100% mechanical systems" will get you wiped out in the long run.

Sorry to read of your loss. The above points are very important, think of them as essential componebts in a car - It's ( Control, direction,etc) all down to you since you are the only one in the driving seat (Psychology).
Apologies for repeating a cliche but " The biggest enemy of the trader is him/herself."

 

[robbiemac]

Sorry to read about your losses.

As a newbie I really appreciate you having the balls to come forward and admit you got your approach horribly wrong. Most would throw in the towel and be to embarrassed to share these bad experiences.

I have made a personal commitment to myself not to trade for a good period of time until I have done as much research as possible. Know dont get me wrong I am itching to start trading but I know if I do then I will be gambling and there is a high probability i will get my **** kicked.

Thanks for putting this up as a sticky.

I really do hope you dont give up trading as I have to agree with some of the comments on here that you have just been given a big lesson in the psychology of trading.

Keep your chin up M8Y and then next you trade you will hopefully be more acclompished in your overall strategies.

 

[strongboes]

Saying that a mechanical system will lead to long term loss is completely false, and i'm afraid this is something which is impossible to prove otherwise.

 

[Masquerade]

I was trying to steer the thread to reach this point but you said it for me.

"discipline, risk control, rules, 100% mechanical systems" will get you wiped out in the long run.

What do you mean by this? He should wildly punt instead, or just that it's not possible for him to win? Or is there some other meaning?

 

[2be]

What do you mean by this? He should wildly punt instead, or just that it's not possible for him to win? Or is there some other meaning?

I think that people that have not yet been profitable traders, or have hit a difficult patch in their own trading, and are presently generating more loses then profits, find it easier to project their own frustration/s in a form of "caring" advise that is nothing more but an undiluted scepticism rising from their own experience. In achieving that anything will do, and such an emotive term as "gumbling" will always do well irrespective of the context. You find them by saying many wise and necessary things in a way that is more negative then encouraging. It is so easy to behave like a circle of selfadorating judges having in front of them a half-confessing, injurred, distressed and disoriented newbee. Shall the newbee be burned on a stake, surely he has done something wrong. Who will then put the first match to the pile that resambles many of our own failings, mistakes and crashed hopes. Obviously it is easy to pontificate of some abstract perfect trader in terms that do not describe anything, apart from achieveving a right sound in trader correctness, paralel to its political cousin. Some say discipline is very important, others in spite of tonnes of evidence condemn it as a part of gumbling mindset, without any explanation. No wander the newbee after suffering losses is getting even more confused. Nobody says trading is easy, but in my opinion it is not helpfull to serve a coctail of well mixed half coocked ideas of how difficult it is to be a profitable trader without any attempt to explain them. Above all trading is for people too, and one does not have to be a martian to be a trader. I do not mean to upset anybody, but a positive word in season often proves to be an important stimulus in the overall developement of a trader.
Best wishes to all,
2be
PS. hope you are not on the other side of my short on the property index, as that would not help you to achieve much

 

[portomar]

Oh...you really are out of your depth.

Difference between gambling and trading? SpeadBETTING doesn't give you a clue. SpreadBETTING has nothing to do with trading. Spreadbets are a moronic product.

If you place a spreadbet you are being positioned against other spreadbet clients, in the same way sports betters are made part of the over-round, they are not in the game, spreadbetters are not in the market, only traders taking positions in futures, stocks or any other derivative, are in the market.

This is simply not always true. some of the spreadbetting firms out there are essentially set up on retail business practices rather than bookmakers ones. one of the spread bet companies i use simply uses your money to take a position in a corresponding future, and makes money on charging you more than they pay in the spread. this is why these companies want you to win, because you're more likely to keep betting, more likely to make them more money. The reality is that most people dont have the capital needed to start trading forex or options in margin accounts, at least at the start. even if they did, their capital would probably be so small that they might as well not "be in the game" you seem to imply by your post that you can influence the market by your position? any retail trader that thinks this is a fool. add to this the fact that in many countries profit from spreadbetting is not subject to tax while profit from options would be subject to cgt, and it becomes quite an attractive place to start. this guys problem is not what method he is using to call the market.

 

[ucbestp]

stop losses dude....i know how hard it is to stick to them....i hate it.....i always want to run the loss and see what happens....but have been nailed for 1400 in about ten minutes....you got to be so thourough. Just think "i like small losses"....and stick to the stops.

 

[2be]

stop losses dude....i know how hard it is to stick to them....i hate it.....i always want to run the loss and see what happens....but have been nailed for 1400 in about ten minutes....you got to be so thourough. Just think "i like small losses"....and stick to the stops.

What I ment was that the one of the flagship of US trading platforms Refco, just disappeared from the face of the earth, was US regulated and so on, rich in any cartificate you would ever wish to see. The accounts has been frosen for about two years, and I got a very little settlement from them, the divided leftovers by the time all have finished with them. Ironically I called it a Refco SL That is not my first experience with larger and well recognised US financial institution, and I shall stay away from them for a while. Some of my friends have also lost with them, well that is life. I wander what is better, being robbed or loosing it yourself?
Have a great weekend and best wishes to all,
2be

 

[ArielGuy]

Really sorry to hear about your loss, and the situation with your wife.

What platform and which broker did you have your trade on with? Some of them make you put in an automatic stop loss, based on the amount you have in your account.

 

[Science87]

Sad Story I can only sum what understand how it feels, I took a loss on oil futures this week too. I just started out recently with 800 doubled my money within 2 days I was amazed, I knew it wasnt right but anyway I soon lost it all, I felt sick because of loosing money so fast and in all honesty I didnt like the idea of going back, however I feel that my loss is what I needed as a kick up the behind so I can approach things in a more planned manner

 

[fernanj]

At what stage does one stop being a gambler and becomes a trader:|.
Firstly I would like to think that the term gambler would apply when one starts out in this business without much of a clue in trading and with very few if any probabilities in his / her favour or should I say that the percentage of ones trading success or losses over a period of time would determine this?

I think the main issue that many of us struggle with is the label “Gambler” we try to justify or camouflage this with the term “Trader” we prefer Trader over Gambler…why? The English dictionary has many “not very pleasant” definitions for this term and most people who start out into this business find it to be an unacceptable label being pinned on their conscience – whereby “Trader” has a more rational and business like meaning to it
In my opinion most if not everything in life is a gamble, the food we eat there is no certainty that it wont give us food poisoning…the cars we drive there is no certainty that they will not get involved in an accident...the list is endless.

The way I play this game is that I do not talk or brag about it to people or persons who do not have a need to know, in that way I do not have to put up with any unnecessary guilt when I see them seeing me as a “gambler or trader”.
I keep my opinions that might hurt other people to myself after all we all have to start somewhere; we have to learn to crawl before we can walk and if gambling in the “right sense” is crawling then so be it!

I have been trading since 1995, futures, stocks, options etc, etc. you name it and in that time I wiped out a number of trading accounts, was I gambling? Yes I was!! The odds were heavily against me, there was very little trading information out there and at a price! home PCs or broadband internet was unheard of as it is today with unlimited information at the click of a button, brokers were unhelpful and rude people they just took your money and would get upset if you rang them too often to check on a position / trade, the so called successful trading community kept to themselves… to cut a long story short, what is it that kept me trading err.. gambling…the truth is, excitement, love and passion for trading the markets, it was not always about the money I just wanted to get that edge, with the odds against me I was “gambling” but my thinking refused to accept this, I knew that this was payment upfront for learning to trade and become successful one day… over the years I am glad to say that the scales have tilted in my favour and I have clawed back all my money and more that the markets took from me and now for the markets its pay back time! Do I still have losing trades? Yes I do, but thankfully these are few and far in-between

I believe I have travelled that painfully long journey where I have emerged from a “gambler” to a “Trader” my conscience decides this for me and not other peoples opinions!

Oh by the way – my preference at present is spread betting, the TA principals and psychology applied gives me an end result no different from trading DMA – I really don’t see why the "big DEAL" and lectures about DMA and spread betting, we all have our preferences and I have attempted them all, just because one does not spread bet and prefers DMA does not in the least make one any better than the other.

Joe

 

[Jaydee]

I think we're getting bogged down with the meaning of 'gambling' and consequently arguing the same thing:

For some, gambling is something in which you only do at casinos or the horses. Effectively, you cannot get an edge which could give consistant profits over an indefinite period of time. This makes you a sucker because you are happy to give your money away to a game of (almost) pure luck.

To others, gambling is anything which involves risk. Essentially, you can get an edge but, as long as that edge isn't 100%, chance has the final say. Gamblers in this catagory include Hedge Funds, Property Speculators, Banks, Traders, Spreadbetters, Poker Players, New Business Startups....basically, everyone.

 

[new_trader]

I'm sorry but to say that using a sb firm to trade is actually gambling and if you did it da then it's trading is complete rubbish!

People also seem to be saying that if you use a sb firm then you aren't very good and your not making a profit? more utter rubbish!

What would you prefer, pay 40% tax or no tax? Wow what a tough decision that is! I think some posters on here have a serious complex

I'm not saying that...at least I don't think I said that...

I said that there is an implication that because spread betting is tax free it is easier to make money. I want to make it clear to any newbies reading this that it simply is not the case, at all.

I'm saying that trading is trading and you have to understand what's what and what's not before you even get to the point of worrying about taxation..do you see? Most people (if not all) who enter the trading arena (especially those seeking advice here)hope to make money short term trading as opposed to investing.

The main (only imo) advantage of S/B to newbies is not that it is tax free, but that it has a very low (zero in some cases) barrier to entry. An account can be opened with as little as £1 and you are a trader! The people that do open an account usually end up coming here after losing a few hundred or thousand pounds asking how to actually make money trading...do you see? They haven't even paid tax yet..or enjoyed the benefit of avoiding it :-0

The question about trading through a S/B over DA is usually one that hinges on the system you use...you see, that's the buzz word in trading..."System"...without one you are doomed sort of thing...apparently...anyway...people who argue the case in favour of S/B usually (not always) but usually trade a 'mechanical system' that is inefficient. In order to compensate for the Inefficiencies they need to avoid paying tax and trade a basket of instruments....mostly this is the case, not always, but I must admit, I do find it highly amusing when people say they trade with 2,4,6 10 screens each displaying 25 different things...my gosh!

So, I'm not in anyway saying that one is gambling and the other is not. I'm saying that if you want to become both an efficient and proficient trader, DA is the superior (only) way to go about it. All IMHO you see...


As for the tax thing...yes, I prefer to pay tax and trade DA...because...well...I don't want to upset anyone...

Good trading to you ...etc

 

[jasy22]

thanks for your words guys. we are not in debt and can save again so financially can recover. I will just have to give up trading and put it down to one of lifes hard lessons. its the lack of trust is the main issue as I took risks with our money, not just mine!

why did I average, I thought theres no way it can keep going up !! but it did. lesson learned.

Your broker should have closed you out with a margin call, your problem was you trusted other peoples strategies that are basic trading tenets of what not to do.

Always use a stop, do not double up adding to losses, do not go against the trend
a stop loss is not really a loss it is a protective measure to keep you in the game.
I hope you trade again, but this time learn off reputable people and use small stakes
with £200 you can make 20 trades with $20 stop losses if crude daily volatility allows it,
if daily volatility is too high trade hourly look at ATR indicator to check this, and build up slowly, then when you make losses they will be on profit made so will be more bearable.

Good Luck!

i also lost money trading but it was only £70 which is smaller than a daily stop loss
1 percent of a £10000 account which is what you should be risking 1-2 percent on each trade. Anybody who tells you other than this is not a trader but a high stakes casino gambler.

 

[grantx]

Strongboes,

"What would you prefer, pay 40% tax or no tax? Wow what a tough decision that is! I think some posters on here have a serious complex."

You're absolutely right - Goldman Sachs, Deutsche Bank , Morgan Stanley, Citibank, Paribas, et al are shutting down their prop desks and opening accounts with Capital Spreads. These sad fcks obviously had serious complexes prior to a wholesale Damascene conversion (they obviously read your post).

Out of curiosity, what percentage of users - SB or DA - get to the stage where the 40% tax question becomes an issue?

Why do you all think all the deluded arcade traders are not hot-footing it to SB's? What a tough decision that is. Obviously, retards to man (and all losers).

Grant.

 

[strongboes]

Grant,

I think comparing an individual small time trader which in the grand scheme of things we all are, to a multi national company is not really appropriate for this discussion.

If you take a general round number of 50k per year for example, run it thru a tax calc online and you could either pay total deductions of £14,407 or obviously not pay it thru a sb interface.

For 100k your deductions are a massive £34,907!!

Surely you can accept the point that not paying tax is better than paying tax?

 

[grantx]

SB,

All your points are valid, and I can't argue with your figures.

So the question remains, why isn't everyone using SB's? I think it’s a question of confidence. You may be one of the fortunate few who enjoys a flawless service with the bonus of zero tax; you have no reason to look for alternatives.

But look at the amount of dissatisfaction on various threads – maybe a minority but for me the issues raised don’t inspire confidence. And in the final analysis, that is what determines my choice – not the upside, but the downside. Again, this is expressed through a minority. If we look at DMA how many negative views do we see? The only questions here are basically which front-end is better – never ABC is always throwing up errors which never happen on XYZ.

No trading system can be 100% reliable nor can any brokerage be regarded as 100% safe. But if weaknesses are already in the system, it could only be a matter of time before they seek you out. This is another variable in the pressures of trading which ought to be minimised, if it can’t be eliminated.

Grant.

 

[Trader333]

Just because its income and capital gains tax free doesn't always mean that it works out for the best financially

This is true, it is better to pay tax on a profit that no tax on a loss. Depending on the type of trading that people do this is an important factor to consider.


Paul