Hi guys. First time poster here. I wanted to share my recent trading experience (futures on oil and natural gas) as I am sure it will help some people on this forum.
I recently got into trading futures on commodities as I found the lure of outsized returns for betting on the right price action amazing. I followed many of the best day traders on twitter and watched all the youtube videos (shorts) but never really got into learning about risk management.
In the first 6-8 months I made close to £70k which was incredible. It was most of my annual earnings from my day job and I couldnt believe it. However I just got lucky.... I was taking naked trades (no downside protection) and outriding the losses because I had enough capital to survive the downs (that always came first) before the ups which made me whole and created a profit.
This kept going for another few months but I got locked into going long in Natural Gas before the trump election (which was stupid) and prices were dropping like crazy. I thought I could ride it out with my capital and buying at $2.7 - I never EVER thought the price would get below $2.5.. let alone $2
The price ultimately went to $1.8 and at 10x leverage, my entire capital stack (two years of savings) was wiped out alongside some loans I took out to try and short.. but it was too late.
I know there are some people out there who don't believe the price will go lower (or higher depending on your position) but I wish someone had shook me then and said take a 10% capital loss and move on with your life and screamed risk management at me. Ultimately I learnt a very hard lesson... I am still on the fence about ever returning but for the time being I am going on a risk management / blue print course on trading to learn how to mitigate risk (I have an awesome recommendation if anyone is interested - its my old man and he is genuinely amazing - been doing it for 20+ years and I still didnt listen!) but hoping to get confidence back before dipping my toes in again.
Please guys. Trade smart and always manage your positions.... I might just be the guy you need to tell you to close that position!
I recently got into trading futures on commodities as I found the lure of outsized returns for betting on the right price action amazing. I followed many of the best day traders on twitter and watched all the youtube videos (shorts) but never really got into learning about risk management.
In the first 6-8 months I made close to £70k which was incredible. It was most of my annual earnings from my day job and I couldnt believe it. However I just got lucky.... I was taking naked trades (no downside protection) and outriding the losses because I had enough capital to survive the downs (that always came first) before the ups which made me whole and created a profit.
This kept going for another few months but I got locked into going long in Natural Gas before the trump election (which was stupid) and prices were dropping like crazy. I thought I could ride it out with my capital and buying at $2.7 - I never EVER thought the price would get below $2.5.. let alone $2
The price ultimately went to $1.8 and at 10x leverage, my entire capital stack (two years of savings) was wiped out alongside some loans I took out to try and short.. but it was too late.
I know there are some people out there who don't believe the price will go lower (or higher depending on your position) but I wish someone had shook me then and said take a 10% capital loss and move on with your life and screamed risk management at me. Ultimately I learnt a very hard lesson... I am still on the fence about ever returning but for the time being I am going on a risk management / blue print course on trading to learn how to mitigate risk (I have an awesome recommendation if anyone is interested - its my old man and he is genuinely amazing - been doing it for 20+ years and I still didnt listen!) but hoping to get confidence back before dipping my toes in again.
Please guys. Trade smart and always manage your positions.... I might just be the guy you need to tell you to close that position!
