I bargained with Life for a penny,
And Life would pay no more,
However I begged at evening
When I counted my scanty store.
For Life is a just employer,
He gives you what you ask,
But once you have set the wages,
Why, you must bear the task.
I worked for a menial's hire,
Only to learn, dismayed,
That any wage I had asked of Life,
Life would have willingly paid.
And Life would pay no more,
However I begged at evening
When I counted my scanty store.
For Life is a just employer,
He gives you what you ask,
But once you have set the wages,
Why, you must bear the task.
I worked for a menial's hire,
Only to learn, dismayed,
That any wage I had asked of Life,
Life would have willingly paid.
timsk
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I agree with J.O.
There are traders on these boards who make good money who have never blown their accounts - or even come close to doing so. The reverse is also true: I lost 70% of my account on one trade which didn't go quite according to plan and, although I've had periods of profitability, I'm a long way off being consistently profitable. Certainly, a number of big name traders who have blown their accounts claim that the lessons learnt from the experience enabled them to turn the corner and make it big. But to suggest that this is the only way to succeed is entirely wrong, IMO. I believe that there is no one way or 'only way' to do anything in this business, and it's that that makes it so difficult and so exciting at the same time.
Tim.
There are traders on these boards who make good money who have never blown their accounts - or even come close to doing so. The reverse is also true: I lost 70% of my account on one trade which didn't go quite according to plan and, although I've had periods of profitability, I'm a long way off being consistently profitable. Certainly, a number of big name traders who have blown their accounts claim that the lessons learnt from the experience enabled them to turn the corner and make it big. But to suggest that this is the only way to succeed is entirely wrong, IMO. I believe that there is no one way or 'only way' to do anything in this business, and it's that that makes it so difficult and so exciting at the same time.
Tim.
Directional
Experienced member
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the Flipper nearly blew his account in his early trading days.
However, I also do not think it is necessary to go down in flames before going up. I think its merely a reflection of the prevailing attitude that trading is an easy way to make money, and in the early stages lack of discipline or understanding of the fact that trading requires much learning before you jump in with cash is punished with a heavy loss - that forces you to understand that discipline and learning are essential before placing a trade.
However, I also do not think it is necessary to go down in flames before going up. I think its merely a reflection of the prevailing attitude that trading is an easy way to make money, and in the early stages lack of discipline or understanding of the fact that trading requires much learning before you jump in with cash is punished with a heavy loss - that forces you to understand that discipline and learning are essential before placing a trade.
I remember one trader from my early days, a very loud American guy who trade the TED spread.
The risk manager told me that he had a very defined trading cycle, he came too us from another house where he had "blown up" and in his first year with us he was methodical measured and very disciplined and had a solid year.
The following year he increased his size and started to trade options and well as futures, he was given a deputy to train and his second year was better than his first.
In his third year he increased his size again and was running a large options book as well as large Eurodollar spread positions and Ted spreads, sadly the company we were with was taken over but this guy jumped ship and moved to a "large American" institution were he was given even more leverage and he enjoyed the Midas touch. In this year he made a fortune, rumours of his bonus reverberated amongst those of us who had worked with him.
But exactly as the Risk manager had told us that was the year they should have booted him out because the following year his ego matched his trading limits and leverage. He was "right" the rest of the market wrong, he didn't last the year blowing up in spectacular fashion he was shown the door. He found a home elsewhere and with his ego busted and humility regained he started all over again.
I guess the point is, every dog has his day and if you can learn by your mistakes and identify your weakness then you can succeed even in this business.
The risk manager told me that he had a very defined trading cycle, he came too us from another house where he had "blown up" and in his first year with us he was methodical measured and very disciplined and had a solid year.
The following year he increased his size and started to trade options and well as futures, he was given a deputy to train and his second year was better than his first.
In his third year he increased his size again and was running a large options book as well as large Eurodollar spread positions and Ted spreads, sadly the company we were with was taken over but this guy jumped ship and moved to a "large American" institution were he was given even more leverage and he enjoyed the Midas touch. In this year he made a fortune, rumours of his bonus reverberated amongst those of us who had worked with him.
But exactly as the Risk manager had told us that was the year they should have booted him out because the following year his ego matched his trading limits and leverage. He was "right" the rest of the market wrong, he didn't last the year blowing up in spectacular fashion he was shown the door. He found a home elsewhere and with his ego busted and humility regained he started all over again.
I guess the point is, every dog has his day and if you can learn by your mistakes and identify your weakness then you can succeed even in this business.
roguetrader
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Trading is a business / profession just like any other, and as such, lessons applicable in managing situations in other businesses / professions apply. Consider the following examination of negativity and the resultant stress
It is often thought of stress as being caused by external circumstances. For instance, how often have you heard “ My boss just stresses me out”? In fact, the truth is that the origin of the stress is “all” internally generated. One way to see this is to recognise that different individuals respond to “stressful circumstances” very differently.
Different responses to “stressful circumstances” are largely due to the fact that individuals perceive these situations differently based on conscious and/or unconscious beliefs that they may be projecting into the situation at hand.
A simple example: Individual “A” fails to get a meeting with an important new client and immediately begins to berate himself for his poor performance. Individual “A” believes he is a failure if he doesn’t get buy in from every new client.
Individual “B” however may see the situation as follows: “Well it’s likely that this client isn’t ready for my services yet so I’ll try again in a couple of months”. Individual “B” believes that the failure to connect with the client is not a reflection on his competence rather an issue of timing.
The effect of the different beliefs on individuals “A” and “B” are as follows:
Individual “A” feels like a failure, his sense of self-esteem and self-confidence plummet. This can lead to preoccupation with future failures followed by anxiety and poor concentration. All this affects future performance and success. Ultimately, we have a self-fulfilling prophecy occurring i.e. “I believe I’m a failure, therefore I fail”.
Individual “B", on the other hand has moved on to the next client without any significant difficulty. He may in fact have thought about how he might creatively assess which clients are more likely to be receptive, thereby boosting his sense of confidence.
Hence the impact of negative emotions are clear. What’s important is that it is unnecessary, for anyone to be the victim of such negativity.
It is often thought of stress as being caused by external circumstances. For instance, how often have you heard “ My boss just stresses me out”? In fact, the truth is that the origin of the stress is “all” internally generated. One way to see this is to recognise that different individuals respond to “stressful circumstances” very differently.
Different responses to “stressful circumstances” are largely due to the fact that individuals perceive these situations differently based on conscious and/or unconscious beliefs that they may be projecting into the situation at hand.
A simple example: Individual “A” fails to get a meeting with an important new client and immediately begins to berate himself for his poor performance. Individual “A” believes he is a failure if he doesn’t get buy in from every new client.
Individual “B” however may see the situation as follows: “Well it’s likely that this client isn’t ready for my services yet so I’ll try again in a couple of months”. Individual “B” believes that the failure to connect with the client is not a reflection on his competence rather an issue of timing.
The effect of the different beliefs on individuals “A” and “B” are as follows:
Individual “A” feels like a failure, his sense of self-esteem and self-confidence plummet. This can lead to preoccupation with future failures followed by anxiety and poor concentration. All this affects future performance and success. Ultimately, we have a self-fulfilling prophecy occurring i.e. “I believe I’m a failure, therefore I fail”.
Individual “B", on the other hand has moved on to the next client without any significant difficulty. He may in fact have thought about how he might creatively assess which clients are more likely to be receptive, thereby boosting his sense of confidence.
Hence the impact of negative emotions are clear. What’s important is that it is unnecessary, for anyone to be the victim of such negativity.
Event + Response = Outcome
Nice post, roguetrader, it reminds me of something I was taught a long time ago, namely that the Event + Response = Outcome.
For example, consider two traders, both long on EURUSD. The Euro plummets but the two traders have different responses: one cuts his losses, the other hangs on for grim life convinced it will recover.
Same event, different responses, equals different outcome. One protects his capital and lives to fight another day, the other is trapped in spiralling losses and possibly blows his account.
As traders we have little if any influence over the event, but can have total control over our response and therefore the outcome.
Nice post, roguetrader, it reminds me of something I was taught a long time ago, namely that the Event + Response = Outcome.
For example, consider two traders, both long on EURUSD. The Euro plummets but the two traders have different responses: one cuts his losses, the other hangs on for grim life convinced it will recover.
Same event, different responses, equals different outcome. One protects his capital and lives to fight another day, the other is trapped in spiralling losses and possibly blows his account.
As traders we have little if any influence over the event, but can have total control over our response and therefore the outcome.
I think you missing the point. Maybe I word it wrong. I believe you need to experience losses,before you go on to make money. and it wont do you any harm, if you take a hit 50% or more of you account.JumpOff said:
And i was not having a bad day. I have had many over the years, Bad days have made me a better trader. I assure you if one starts out trading and dont lose any money in the first 6 months, I guarantee they will give most if not all of it back to the market.
I say it again, you need to experience losses before you go on to make money.I stand by that statement
badtrader said:
Is it that a trader must make whatever inner shifts toward loss as part of really being ready to succeed and that actually experiencing losses is the BEST way to accomplish that? Real psychological 'triggers' are better opportunities to 'get it' than imagined ones. All those 'successful' traders who never 'have' to go through that either don't need to learn those lessons from trading or the loss lessons with their name on them just haven't happened yet...
Is this what you're getting at?
ZDO said:
Successful traders, will tell you they have experience losses and they have learned form it. This has made them a better trader.
I am sure someone can name one great trader who blew is account more than once. who made millions. I now who he is
Loosing and how you deal with it is every bit as important as winning and how you deal with that.
Knowing when too cut losses and when to take profits.
You learn, very often the hard way, watching a substantial profit vanish because you got greedy, watching a loss grow because you did not cut it soon enough in the vain hope the market would turn back your way.
Yep we have all been there, but learning from your mistakes and keeping too the program, discipline, discipline, discipline.
Knowing when too cut losses and when to take profits.
You learn, very often the hard way, watching a substantial profit vanish because you got greedy, watching a loss grow because you did not cut it soon enough in the vain hope the market would turn back your way.
Yep we have all been there, but learning from your mistakes and keeping too the program, discipline, discipline, discipline.
Personally, these days i know i will never risk too much......i enjoy trading too much, i enjoy the markets for what they are and there is an overall line that you just can't cross. This may sound like a very simplistic statement, but that comes with experience. Believe you me, nobody ever needs to 'blow' an account to 'teach' themselves. Everybody knows the score deep down....some people can't help themselves though. Do they enjoy trading? Or are they just suckers for punishment?
