Best Thread £10k wipeout

[banny66]

ADVFNTRADER

Sorry to hear about your losses.

I am new to the spread betting and I was doing okay last week. Made about 4K in 2 days then found I made £8k on Monday morning shorting Wolseley (WOS).

The I went stupid. Ended up shorting the FTSE at £100/point, shorting £/$. Everything when against me. No stop losses etc - bloody idiot I am!

Anyway, net result I was lost £20K yesterday . So went from an £8k profit at 8am to £20k loss at 7.30 last night. Spent ages trying to recoup, betting on currency, US markets etc. basically I panicked and was Pi@s#%d off with myself and very angry with my stupidity.

I will NEVER make those mistakes again. I am now back in the market placing small amounts and stop losses and limits to take profits.

I have learned a very valuable lesson. Like they say you learn from your mistakes and I am sort of glad (!) I have had my fingers burned early on.

Good luck mate

 

[oiltanker]

we have all been there.

imo commodities like oil and indices are not places to begin trading. try bonds. 40pt ranges. 10pt stops. easy to trade on daily charts and if its wrong no big hit. it slows the game down.

i remember simon from CS saying [let slip?] all those markets on the first page 0f their site are those they make the most money from. you won't find bonds on there.

until one has a batch trading edge just demo? otherwise it is just gambling?

sorry to hear the pain and thanks for sharing.

 

[advfntrader]

update : I am now demoing. doing quite well and I feel I now have a goal. I understand a LOT more now that I did a year ago but I still have some way to go. I will not put another penny of my own money into the market until I can prove I am profitable in a demo account.

the pain of the loss has now gone but its not forgotten, I will never let myself get into that mess again by limiting losses to 3% of account max

 

[Crazygains]

Sounds like his first mistake was over confidence. I found out that the same way. Lost 3K on a wrong way short. It was tanking when I shorted then some bizarre twist it took off to an all time high and left me kicking an screaming etc...

 

[Primechartsuk]

OW, Sorry

Not nealry as bad as your loss, but I got caught out with RBS, I kept getting in at lower price to bring down my average down, I should have known better and sold when it broke through support, I am now sitting with 5k of RBS that needs to get to 50p before i break even.

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

 

[shahram2611]

update : I am now demoing. doing quite well and I feel I now have a goal. I understand a LOT more now that I did a year ago but I still have some way to go. I will not put another penny of my own money into the market until I can prove I am profitable in a demo account.

the pain of the loss has now gone but its not forgotten, I will never let myself get into that mess again by limiting losses to 3% of account max

sorry to say that but demo trading is useless and gives fake hope.
instead of that i suggest you open a mini or even a micro account and trade real money.
in this case at least you have a feeling of real gain and loose however it can be very small.
i also lost 5k few years back trading against trend but now doing well after those years.
cutting losses in early stage is less painfull than let it to grow, also use as low as leverage you can.

 

[advfntrader]

I am going to open a Micro account as I feel you are right, demo has no emotion attached to it and it almost seems so easy.

 

[Crazygains]

Paper tradeing is not real. You don't get slippage-or-anxitiety you put in ur order get your price. In real fast live stock trading u get what u get maybe not the price u wanted but ur in and u make the best ov it = more anxitiety and waiting to see if ur right it's stressful ...I suppose the oldtimers are past this but its a shock to a newbie...I'm doing limit orders now on w/smaller lots to stablize this...A lot more attention to indicators an my own limits & rules.. Demo tradeing does not force u to change an re evaluate your methods----it breeds false confidence.

 

[slicker2009]

Hi everyone

Started trading spread bets last week since my shares are down form my initial investment of £20K over the past couple of months to about £14K - ouch!

Figured a better way to make money at the moment is spread betting.

Rushed into it at first and lost £3,500 in a day! Didn't have stops, didn't work out that I was effectively betting on £50k of HSBC shares, got in on rising trends etc. The usual newbie mistakes.

Managed to claw back on Thur and Fri and now up £1K on the spread betting.

I seem to find it 'easier' to make money on shorts than longs - could be my pessimistic nature

Lessons learned -

Stop losses and limits always
Do your maths - £100/pt on BHP Billiton is big money!
Don't listen to bulletin boards
Don't follow tips blindly
Read the news constantly and check digitallook etc regularly
Don't be greedy
Get in on the turn either at bottoms or tops, not half way
Learn some technical analysis - candlesticks seem to work for me
Read some books - they are full of good advice
Don't panic when you make a loss - you can't win 'em all!

Cheers and good luck!

Banny

Hi there .
I like the bit about "don't panic when you make a loss" , but it is easy to get angry and think that the loss was a one off moment of chaos with the share price ,so you dive in again to get your own back ; but its a bit like a fruit machine and before you know it you've put £100 pound in the machine to win a £25 jackpot.
I am new to spread betting and I know that once I've been stopped out I must wait , look again at the interday chart and patiently put a bet on at an appropriate time ; but thats in theory , in reality ,I put another bet on within seconds of being stopped out .
Maybe its like getting a fix because you miss feeling high . ( PS I get a buzz from risk , not from drugs )

 

[banny66]

Had a think abouy my c#ck up and it was down to not understanding the market and terrible risk and cash management management.


Basically the 3 most important things!!!! I got greedy and swept up in the moment. Dreams of doing my job 3 days a week and trading the other two, clearing my mortgage etc. etc. got the better of me .

Sat back for a few days and looked at the whole situation. I've bought a few more books and am doing some reading and scouring the internet for articles. I need to really get to grips with charts and indicators as well. I thought I understood them - now I know some people have forgotten more than I know.

Just reviewed my trading report from my "Black Monday" . Makes bad reading.

I was on between £10 and £80 a pip on £/$!!!!! Longing one minute, shorting the next trying to get back my losses. At £10/pip I would be wiped out in no time.

I was also on FTSE at between £10 and £300 a point, GERMAN30 at £40/pt, USRUSS2000 at £10/pt, NDAQ100 at £100/pt. Longing, shorting.

I was sat in front of the screen clicking the mouse all the time. Surprised I didn't have a heart attack.

What I've written above seems absolutely madness. I still wake up some mornings and think "did I really do that?". It was 100% gambling.


I should have realised that currency is very volatile and even a 1 cent change a day magnifies your stake a 1000 times. Not to mention your margin getting wiped out and position liquidated. I am so annoyed with myself.

The funny thing is I am quite a cautios and methodical person (I am actually a partner in a firm of chartered accountants - don't go asking me for advice) and and am completely uninterested in fruit machines, horses etc.

I mustn't have been thinking straight.

Left with £1,600 of my initial cash. Traded some shares that I have been following daily for about 3 months and am up £800 on Thursday/Friday so back to £2,400.

Until I can prove I can make money at this I am keeping trades extremely small. Stop losses at about £50 per trade - this is a little high at the moment though (2%). Making a plan and sticking to it.

I will have another go at FOREX but not yet. Even 10p/pip is a bit much for me yet!

I am lucky that I could afford to lose the money and have other investments to cover me so I am willing and able to give it another try.

Anyway, that's enough from me.

Good luck to you all.

Paul

 

[donone]

Well banny,

It seems that's the first of Elder's "Learning accounts" as it were

It seems clear from his posts that BS has only very recently started too - but I suspect (s)he is recently out of school - maybe a student ? whose view of money is a little distorted by it's scarcity.

One thing you could look at, is the commission you've had to pay on your bets for "Spreads" - Day trading though a SB account is a bit like playing a one armed bandit - if the bets don't kill you, the spreads will - eventually - gl & keep us in the loop

PS - I note you contrast day-trading & "Investing" - don't forget there's periodic trading (holding for a few days/weeks) - Swing trading - too

 

[banny66]

Well banny,

It seems that's the first of Elder's "Learning accounts" as it were

It seems clear from his posts that BS has only very recently started too - but I suspect (s)he is recently out of school - maybe a student ? whose view of money is a little distorted by it's scarcity.

One thing you could look at, is the commission you've had to pay on your bets for "Spreads" - Day trading though a SB account is a bit like playing a one armed bandit - if the bets don't kill you, the spreads will - eventually - gl & keep us in the loop

Donone

I just wish I had done the maths. At £100 a pip when it was $1.40 and now at $1.50 I could have been a half millionaire (or lost half a million)! But instead I got margined out each time and got took for £400 spread No wonder I blew £20K.

It was an experience no doubt. I'll be laughing at this in 5 years

 

[banny66]

Donone

I am veering away from day trading, it is too volatile unless some good/bad news is going to be released and and you can get the edge.

I think it will have a place but it is too frantic. Plus I have a business to run

Who would you recommend for day trading though. Or are all the spreads about the same?

 

[ceydababy]

Blowing up ten grand, twenty grand, repeating the same mistakes...I have no sympathy, it's just not necessary to trade in that manner when you're starting out. Move away from this mindset that it's a 'rights of passage' to fail that badly, it isn't . I don't know any succesful traders managing their own cash/account who ever blew up that kind of cash so quickly and then went on to have decent self employed careers. The majority kick the virtual cat when they lose a couple of hundred quid on a trade.

If you read Market Wizards and The New Market Wizards by Jack Schwaeger I would say the majority of traders interviewed in that book had bigger wipeouts when they first started than the amounts lost here.

I also think that everythings relative. If you have £1million in the bank £20k is nothing. However, if you have £2k in the bank £1k is ENORMOUS.

It's a bit of a generalisation and not statistically relevant that based on the succesfull traders you know, a small sample of the sucessful traders globally (I would imagine)that because none of these success stories blew up "big cash" and went on to become succesful anyone blowing up "big bucks" is not going to go on and become successful.

However, I do agree that if you don't know what you're doing...Why are you trading that size !!

 

[.Ben]

At £100 a pip when it was $1.40 and now at $1.50 I could have been a half millionaire

Took me a while to work this out but you meant 'now at $1.45' I think (£50,000).

This thread brings back some memories of over-trading and big losses. It was gambling basically. Thanks to everyone for being so honest though, helps to remind me that I should use careful money management!

 

[amistupid?]

i lost about £10 in six months with spread betting a year ago i havnt traded since as i felt i was becoming addicted and was trading for tradings sake i feel ready to reenter the market having analised where i went wrong. i honestly dont think i should trade more than maybe once a month till time is right and i can place a high probability trade. i was up £35000 at one stage but got greedy .
am i wise trying again and if so how much cash should i risk to start with?
im considering shorting the nasdaq on monday as my first trade any advice

 

[banny66]

i lost about £10 in six months with spread betting a year ago i havnt traded since as i felt i was becoming addicted and was trading for tradings sake i feel ready to reenter the market having analised where i went wrong. i honestly dont think i should trade more than maybe once a month till time is right and i can place a high probability trade. i was up £35000 at one stage but got greedy .
am i wise trying again and if so how much cash should i risk to start with?
im considering shorting the nasdaq on monday as my first trade any advice

No problem trying again, that's what I am doing.

But, in my limited experience, I would advise against betting on indexes or currency unless you do it for very small amounts and have studied the movements in detail for quite a while.

I shorted the FTSE100, it went up. I had to get out due to margin then lo and behold it started drifting down each day after that I traded on a gut feeling the night before and placed too much of a bet on and got s~rewed.

Even £/pt on FTSE can lose you £100-£200 in a day, partic if you have no stops.

If you have starting capital of £10k then maybe you could do it £1/pt but I am tempted to advise against it.

Just my view.

 

[Black Swan]

Here's a thing, why not set yourself a target and work backwards. OK, what would be a reasonable return by the 30th December you'd be happy with in your first year of SB? Let's say a modest 15 grand, bearing in mind this is tax free (save arguments for another thread) this therefore equates to having to earn, out there in the 'normal' world of work, circa 23K. Work it backwards into how much you'd have to make every day to acheive this 15K, 60 quid a day = 300 per week = roughly the 15 grand.

Now this can easily be acheived by employing and capitalising an IG index account with 500 quid after doing the six week tradesense programme (or keep it to four); building up to a quid a pip and only 50p on forex and staying in the quid a pip range for the year.

Now here's where it gets interesting, if you stay in that range and place stops of perhaps 25 quid on forex, meaning you'll be 50 pips out if you get stopped, and 50 quid on the indices you could have a very bad day at the office - 4 losing trades and perhaps lose 200 quid max. on that day, a killer but not life changing; unless you do that three days on the run and find you have to fund the account by another 100 quid.

At that point you really need to analyse all your trades and discover a pattern that needs a remedy. Now 4 bad trades in a day and being the wrong side would be poor judgment, 3:1 should be the worst and hopefully your winner should compensate for your losers; lose 75 on three, make a hundred on one = close on break even.

Now if you look at the tale of the tape on this/your worst days performance you could actually take some pride and satisfaction that you managed your money well and applied some discipline, you kept your losses to the minimum set out in your plan.

Consider this, most new businesses fail, most take 3 years before break even, during which time you're constantly paying out bill after bill, dealing with the revenue, talking up your employees, all to be an unpaid tax collector for the govt. Here you have an exciting opportunity to write your own book, manage your own destiny, and you can grasp this by not blowing the opportunity and that means not allowing yourself to blow up. The longer you're in the game the better, even if you still have only the original 500 in your account at then end of 2009 from today but have had the experiences - highs, lows, good trades, bad trades etc. to enable you to use all that as a platform to build a better 2010. Even if you lose in the first year, lets say it's a grand, that could be a small price to pay for such an invaluable education.

 

[slicker2009]

Hi there Banny .

I'm new to this forum , had a close eye on FTSE 100 shares for the last 10 years , have dabbled a little in spread betting from time to time , but have only recently decided to enter into the game with a dream to turning into a professional . I admit I don't know much compared to others , but LOVE dabbling in shares ( initial pot which I am fully prepared to lose is £ 1000 . Call this my education fee). Over the last 2 weeks my spread betting cash balance has wavered between £ 700 and £ 1400 , and is presently at about £ 1200 .

I can spend hours looking at charts and enjoy doing it . I would LOVE to make a career out of share dealing .I am currently a mathematics lecturer ; my job is financial rewarding , but I wish that one day I could be my own boss and get out of bed when I feel like . I know you may think I'm going cuckoo but don't you agree we all have the right to DREAM .

PS I am enclosing some advice I have picked up recently which may benefit anyone reading on this forum .

1. Don't make any 'in-running' bets (i.e. identify opportunities while the market is closed). Decide in advance the level you will trade at and try not to give into temptation and buy too early.

2. Never average down - i.e. do not increase your position when the market moves against you.

3. Do not move your stop loss once set.

4. If the position is going against you never move your stop further away.

5. The advantage of setting stop losses close to your opening level is that you can afford to make more than just one attempt to call the market.

6. Do not set you stop losses too close to the current market price. Do this and you will get stopped too often (death by a thousand stops...).

7. Control your Ego. There are times when you will be wrong in your trading decisions. When you're wrong, you need to accept it – and be prepared to cut the position quickly. This is a particularly difficult skill to cultivate, as we all want to be right, all of the time.

8. If your bet is in profit move your stop to trail the share price, never be afraid of locking profit in.

9. You must constantly evaluate yourself and the trades you make, i.e. complete a trade journal with reasons why you entered and exited trade.

10 .The greatest problem, will be, believe me, restraining yourself.

11.
A dream written down with a date becomes a goal.
A goal broken down becomes a plan.
A plan backed by action makes your dream come true.

 

[banny66]

Hi Slicker

I agree with everything you say.

I am reading a few books at the moment about people starting out in spreadbetting, particularly currencies. Their experiences are pretty much what I went through. When I read some of the things they did I think "That's exactly like me".

I am a quick learner though and realise how unrealistic it was to make money from the start without any real knowledge and experience.

I've gone back to basics now, SB with shares I have followed for a while. Setting realistic stop losses. Locking in profits when possible but carrying on riding the share if I am doing well, 1% risk on capital etc.

I've learned that the markets don't always do what you want them to, they do what they have to. If the smart money is pushing up a price and they are aiming to sucker the less experienced in then they will do just that.

For example, seeing what has gone on over the weekend in the news etc, my first expectation is that the FTSE will go down on Monday. However, I've learned it can do exactly the opposite of what I think would logically happen. Then when we've been sucked in the slaughter starts and we sit there like a rabbit in the headlights.

For that reason I would stay away from indices and currencies until a pattern has emerged after any announcements, news etc. Then I would consider my exposure as indicated by my research.

Having said that, I am still keeping away from the FTSE and £/$ for quite a while yet :cheesy: