Nearly blown account

[Iconoclast1978]

Hello guys, I'm sure you're familiar with this story. I basically got over confident and started aiming for massive wins and just was not experienced enough to trade during conflict times so I have lost a lot of money.

I love trading. Thoroughly enjoy the profession and I'd love to be able to spend the rest of my life doing it. Being at home with my family also, with no boss or really time restrictions or responsibilities (other than not blowing all my savings) is a massive plus. I want to stay in the game.

I tried a bit of scalping the other day and made a few hundred dollars on oil but as soon at the U.S woke up I lost that and more as I couldn't deal with the extra volatility. I have some ideas going forward to stay in the game and would love feedback.

- Aim to end each day green to begin with ($100 - %150 is sufficient)
- Stop chasing big pay days
- Trade with smaller positions
- Trade on lower time scales short term - Seconds to hours
- Wait for point of resistance, then wait some more to enable very low stop losses and take modest profit also
- Always use a stop loss and never extend them
- Only let trades run on to bigger financial gain once I'm in the green for the day and SL for that trade has been set in the green and / or trailing
- Reduce leverage. Particularly during times of great volatility 7am - 09.30am & 1pm - 4pm
- Stick to WTI Oil, Nasdaq and Euro/ USD as am most familiar
- Syphon 50% of profit into unleveraged stocks that I believe in
- Protect my capital at all costs

From Jan to mid Feb I was earning $300 - $600 per day until the Ukraine conflict kicked off and I was hoping a dream had come true. Ever since then I've been losing a ton of money. The odd big pay day has been eclipsed by 2 or 3 very red days.

If anyone has any advice or criticism I'd love to hear it.

Thanks

 

[Iconoclast1978]

1 other thing. Pick each trade cautiously. I don't need to be in a trade every minute of the day.

 

[ffsear]

I think all the points you have made are excellent...

Only thing I would add and (as it helped me , I'm also a scalper) Is try scaling out of your trades... I like to take 2/3 or my position when I've picked up an initial move and leave 1/3 on (with stoploss at break even) to try and catch a bigger move.

 

[tomorton]

There's a lot of stuff to find fault in in your recipe. I like that you have reviewed the trading problem and come back with some detailed tactical principles, but some of them are unorthodox to say the least.

Have you any significant trader or teacher or even trading strategy which is a support for what you've listed?

 

[Iconoclast1978]

I think all the points you have made are excellent...

Only thing I would add and (as it helped me , I'm also a scalper) Is try scaling out of your trades... I like to take 2/3 or my position when I've picked up an initial move and leave 1/3 on (with stoploss at break even) to try and catch a bigger move.

Thanks, I'll certainly bear that in mind. Makes a lot of sense. Been doing it but more for my losers than winners if that makes sense. In fact you've touched on my biggest failing, cutting loses. Hardest thing in the world to exit a risky position that's in the red but heading in the direction of green. The amount of times I have said to myself "I wish I had sold that at $200 in the red 4 hours ago lol..

 

[Iconoclast1978]

There's a lot of stuff to find fault in in your recipe. I like that you have reviewed the trading problem and come back with some detailed tactical principles, but some of them are unorthodox to say the least.

Have you any significant trader or teacher or even trading strategy which is a support for what you've listed?

No I have had no training from anyone.

Would you mind telling me which ones you think are unorthodox?

I have back tested the EURUSD x200 possible openings between 6am and 6pm with 2:1 loss gain on the 5 min chart entering or exiting when the macD gives the appropriate signal either above the 200MA for long and below 200MA for short and it's about 75% successful. I'm probably going to test it real world this coming week.

 

[tomorton]

No I have had no training from anyone.

Would you mind telling me which ones you think are unorthodox?

I have back tested the EURUSD x200 possible openings between 6am and 6pm with 2:1 loss gain on the 5 min chart entering or exiting when the macD gives the appropriate signal either above the 200MA for long and below 200MA for short and it's about 75% successful. I'm probably going to test it real world this coming week.

For one thing, even considering trading off a time-frame of seconds. Have you come across anyone who backs this up?

 

[Iconoclast1978]

For one thing, even considering trading off a time-frame of seconds. Have you come across anyone who backs this up?

Ah I see. No I'm not really endeavouring to trade in seconds, but some trades will obviously hit stop loss or take profit in seconds on occasion. 99.99% of trades will be minutes to hours.

 

[timsk]

Hi Icon',
What percentage of your capital are you putting at risk per trade?
Is this capped, so your max' loss per trade never exceeds the percentage risked?
Tim.

 

[Iconoclast1978]

Hi Icon',
What percentage of your capital are you putting at risk per trade?
Is this capped, so your max' loss per trade never exceeds the percentage risked?
Tim.

Hello,

Well, I haven't been disciplined in this area and that has punished me badly but I will be from tomorrow onwards.

The percentage will be capped by the stop loss and it would be roughly 1.6 - 3.2% per trade depending on the type of trade I'm running.

 

[timsk]

Hello,

Well, I haven't been disciplined in this area and that has punished me badly but I will be from tomorrow onwards.

The percentage will be capped by the stop loss and it would be roughly 1.6 - 3.2% per trade depending on the type of trade I'm running.

Hi Icon',
Unless you have a thoroughly tested plan that shows beyond any shadow of doubt that risking this much is workable, I suggest you stop trading real money immediately as, likely as not - you'll blow up your account sooner rather than later. If you have three consecutive losing trades which, unless you have an extremely high success ratio, is very possible then, by your own figures, you could lose close to 10% of your account in one session. Four losing trades and you're above 10%.

In your OP, you mention: "Aim to end each day green to begin with ($100 - %150 is sufficient)." [Sic] This suggests to me that you have an amount in mind that you want/need to earn in order to make the whole venture worthwhile? Understandable though that is (been there, bought the T shirt), I can tell you from personal experience that it's a surefire way to disaster. Forget about what you want or need - it will cloud your judgement and the market doesn't give a poop. (If the latter, get a job and trade on the side.) Focus solely on becoming consistently profitable - no matter how small the profits are. That's all that matters.

So, go back to paper trading and risk a much smaller percentage of your account per trade; I suggest somewhere between 0.1 - 0.5% tops. Once your plan is thoroughly tested and you're consistently profitable on paper, switch to real money. If you break even in your first year - you're doing well. In your second year, if you equal or better what you'd get on deposit at a building society - pat yourself on the back. Year three, look to double that.
Tim.

 

[Iconoclast1978]

Thank you buddy for your valuable feedback. I'm going to digest what you have to say and get back to you on it but I have to be honest, I'm kinda screwed now unless I can make some money so it makes no difference. I can't go back to running my business as I can't do 80 hours weeks any more with endless stress. I want to remain alive for my kids for another 20+ years and that simply wont be the case if I go back to that.

My risk btw was wrong. It was 1.6% max per lot of which I have x2 so 0.08% over all per trade. This is based on a set of rules that I'm currently back testing and seems to work approx. 75% of the time. Still testing as we speak.

On another note my manual trading off the cuff was working ultra well following pattern analysis, before the war broke out. I was risking too much for the increased volatility that conflict brought and my risk just couldn't handle often triple the volume and volatility, just totally destroyed me. In retrospect, I wish I had had a word with myself as I know nothing about trading during war time.

 

[timsk]

Thank you buddy for your valuable feedback. I'm going to digest what you have to say and get back to you on it but I have to be honest, I'm kinda screwed now unless I can make some money so it makes no difference. I can't go back to running my business as I can't do 80 hours weeks any more with endless stress. I want to remain alive for my kids for another 20+ years and that simply wont be the case if I go back to that.

My risk btw was wrong. It was 1.6% max per lot of which I have x2 so 0.08% over all per trade. This is based on a set of rules that I'm currently back testing and seems to work approx. 75% of the time. Still testing as we speak.

On another note my manual trading off the cuff was working ultra well following pattern analysis, before the war broke out. I was risking too much for the increased volatility that conflict brought and my risk just couldn't handle often triple the volume and volatility, just totally destroyed me. In retrospect, I wish I had had a word with myself as I know nothing about trading during war time.

Hi Icon',
I hear you regarding the stress and your job - you have my sympathies. However, throwing everything at trading almost certainly isn't the answer. Ask yourself this vital - absolutely critical - question: if you blow up your account completely and lose everything - what impact would that have on your finances and relationships? If they can survive - then it may be - just may be - worth the risk. However, if you need that money for a mortgage, holiday, kids education etc., stop trading. NOW!

Re.volatility, if this is the only factor that screwed you over - then that's easy(ish) to fix. Tie your risk per trade to the Average True Range indicator. When I day traded U.S. stocks during the financial crash of 2008, I did exactly this and it worked an absolute treat. I had tables printed out so that I could just look at the ATR reading and go to the appropriate column and that told me exactly how many shares to trade. I did it manually, I'm sure these days there are bits of software available to do this automatically.
Tim.

 

[Iconoclast1978]

Hi Icon',
I hear you regarding the stress and your job - you have my sympathies. However, throwing everything at trading almost certainly isn't the answer. Ask yourself this vital - absolutely critical - question: if you blow up your account completely and lose everything - what impact would that have on your finances and relationships? If they can survive - then it may be - just may be - worth the risk. However, if you need that money for a mortgage, holiday, kids education etc., stop trading. NOW!

Re.volatility, if this is the only factor that screwed you over - then that's easy(ish) to fix. Tie your risk per trade to the Average True Range indicator. When I day traded U.S. stocks during the financial crash of 2008, I did exactly this and it worked an absolute treat. I had tables printed out so that I could just look at the ATR reading and go to the appropriate column and that told me exactly how many shares to trade. I did it manually, I'm sure these days there are bits of software available to do this automatically.
Tim.

Honestly mate, it'll sting but my current position is pretty bad due to having time off from work through burn out. My business made a lot of money but it also required/ requires a lot of money. Me being out of action was never a viable option and well, I had total burn out and everything ceased.

Basically I'm between the devil and the deep blue sea unfortunately.

Thank you so much again for the feedback. It is genuinely appreciated. I will look into the ATR today whilst back testing. I think volatility and risk management were factors, along with revenge trading.

 

[LuckyMac]

I think all the points you have made are excellent...

Only thing I would add and (as it helped me , I'm also a scalper) Is try scaling out of your trades... I like to take 2/3 or my position when I've picked up an initial move and leave 1/3 on (with stoploss at break even) to try and catch a bigger move.

Completely agree with this. I scale out of trades using percentage return or ATR as i am scalping too. It is key as you need to bank something but trades can run. It has to fit in with your plan and the structure you have

 

[Farm Yard Forex]

I love trading.

Love your capital more. Your goal as a trader is to protect it above all else. Focus on risk first and what you stand to lose and not what you stand to win and you will find your trades are higher probability and your performance increases.

 

[HeavLeighGill]

I think you have several good ideas to use moving forwards and I also saw some great suggestions in the comments, so hopefully you'll be able to turn things around from this point with everything in consideration!

 

[Iconoclast1978]

Thank you all so much for feedback and support. I had a long day yesterday. Results from my system were excellent. Back testing gave me 95% success but forward testing only 66% for reasons I'm sure many will find obvious. However, 66% at 2:1 is phenomenal if can be repeated consistently.

I did some random trades of my own they made as much as others lost so not great but risk was controlled well.

Lets see what the day brings. Good luck to everyone out there. Markets look grim ;-)

 

[Iconoclast1978]

Love your capital more. Your goal as a trader is to protect it above all else. Focus on risk first and what you stand to lose and not what you stand to win and you will find your trades are higher probability and your performance increases.

this yes^^

 

[Farm Yard Forex]

Thank you all so much for feedback and support. I had a long day yesterday. Results from my system were excellent. Back testing gave me 95% success but forward testing only 66% for reasons I'm sure many will find obvious. However, 66% at 2:1 is phenomenal if can be repeated consistently.

I did some random trades of my own they made as much as others lost so not great but risk was controlled well.

Lets see what the day brings. Good luck to everyone out there. Markets look grim ;-)

If that can be maintained, in fact even if it drops off to 50%, you will be laughing.