Blowing your account - 'how do you get back up!?!'

[stevoeo]

A member of this forum was kind enough to post a link to a video of a guy loosing $25K trading stock futures! I found it very interesting, the worst thing is that the 25K was the man's life savings. Oh my goodness, watching your life savings go down the drain as if it's like nothing. Truly the markets have no mercy at all poor fellow.

Now the thing is how will the 'poor fellow' pick up the pieces........how do traders who blow their accounts recover, especially when you are dealing with considerable amounts especially for those who just started trading larger amounts? HHmmmmm!?!

 

[Splitlink]

A member of this forum was kind enough to post a link to a video of a guy loosing $25K trading stock futures! I found it very interesting, the worst thing is that the 25K was the man's life savings. Oh my goodness, watching your life savings go down the drain as if it's like nothing. Truly the markets have no mercy at all poor fellow.

Now the thing is how will the 'poor fellow' pick up the pieces........how do traders who blow their accounts recover, especially when you are dealing with considerable amounts especially for those who just started trading larger amounts? HHmmmmm!?!

You have to find some sucker to finance you

or

You have to get a job.

 

[Mr.J-Arthur]

I've had a large loss, but never my whole account.
The beauty of futures trading is that you CAN make it back!
But it's because of a loss that we gain more insight on our own self and our habits.
The market is there, just doing it's "thing" and our responsibility is to not fight a movement...
Easier said than done.

 

[shadowninja]

Indeed. Let's hope the insight doesn't cost us $37k (that's the total that guy lost that night!).

 

[chilltrader]

A member of this forum was kind enough to post a link to a video of a guy loosing $25K trading stock futures! I found it very interesting, the worst thing is that the 25K was the man's life savings. Oh my goodness, watching your life savings go down the drain as if it's like nothing. Truly the markets have no mercy at all poor fellow.

Now the thing is how will the 'poor fellow' pick up the pieces........how do traders who blow their accounts recover, especially when you are dealing with considerable amounts especially for those who just started trading larger amounts? HHmmmmm!?!

I would be surprised if people started trading larger accounts without having proper money management in place. In fact for that matter, an account of any size!

I'm currently on a demo account and I like to believe I have only 1000 GBP to play with

Still reading and hate to think of getting even a 3K live account without understanding and experimenting these money management / risk control techniques.

I'm always fearful and think about the worst thing the market might do to my position!
and I don't want to change that since whenever I got cocky the market showed me who the boss is

 

[BSD]

A member of this forum was kind enough to post a link to a video of a guy loosing $25K trading stock futures! I found it very interesting, the worst thing is that the 25K was the man's life savings. Oh my goodness, watching your life savings go down the drain as if it's like nothing. Truly the markets have no mercy at all poor fellow.

I suppose the first and most important thing to realize is that bad things like that do not just happen, they are most definitely not anything that should ever happen to a professional trader who has got a proper risk and money management plan in place.

If you have a halfway decent system with an edge, and do not risk more than 1 or 2 % per trade, and have the discipline to stick to both your proven system and your money management, something like that will never happen to you, you will never blow your account like there is no tomorrow.

You will have the odd trades where markets breeze past your stops with little regard for them, meaning occasionally you will lose more than your planned 1 or 2 %, but even in those outlier events the damage to your account will be very far from fatal.

The thing is to stay disciplined, to not start revenge trading or going Martingale if you had a fight with your partner, have a tooth ache, had a string of losses, etc.

Keep your brain fart of the day out of markets, and you'll be fine.

 

[rathcoole_exile]

self-portrait mate ?

 

[BSD]

And that's on a better day already too

 

[Mr.J-Arthur]

Mr. Livermore blew his account a few times I think

 

[PualoP]

Yes, and when he'd blewn through all his accounts he turned to his brains!!

 

[Splitlink]

Yes, and when he'd blewn through all his accounts he turned to his brains!!

He left over $5 million. He, obviously, put trading skills above personal wealth, not like you lot

Something to be considered by all of us. Splash it about a bit.

 

[georgebush]

Does anyone have a link to this video?

A member of this forum was kind enough to post a link to a video of a guy loosing $25K trading stock futures!

 

[pseudo straddle]

Does anyone have a link to this video?

George, there is a link [ from shadowninja ] in post #4 of this thread -

is that the one you want?

 

[ycomp]

I'd say start small... $5 to $10k max account...(someone said futures right? with forex you can go even smaller like $3k to $5k is enough for it to "feel like something" but not so much you can't recover from it) no point wasting money until you are good..

so if you lose it all, you can replenish it in a reasonable amount of time... it is not your life savings.

 

[nick 462]

I'm spread betting & if I were to use 2-3 % of my trading capital that'd give me a £10 deposit. Instead I've decided to put in £50 lots & small [<£5 bets] to try to build up capital. If / when there's enough I will probably use the 2-3% 'rule'

 

[Mr.J-Arthur]

Livermore's story is inspiring. Imagine being a trader back then, and all you have is the ticker tape to go off of! Yikes. And the bucket shops galore (kinda like forex!).

 

[grimweasel]

I have a mate in the city who trades Forex for the banks. His advice to me was 'stay away, as forex is true bandit country'. He said none of the currency traders at his bank trade forex in their own accounts. He said the best way to make money was by taking the long term view a la 'Ben Graham' et al and studying the balance sheets for hidden value gems.
Steer clear of the FTSE 250 as they are all researched hugely by the big boys; stick to tiddlers and do your research thoroughly to find the true hidden gems. They should not come along that often either so that stops you from over-trading.
Most of the forex market is set up by the big players to leech money from the small players. What you think you see you often don't and could do better trading in the opposite direction to what you think the charts are telling you.
All his words not mine but it does make you wonder if us 'tiddlers' ever stand a chance. I know there are a few people that make it but that could be down to randomness; if you have a sample pool large enough then there will always be a few 'lucky' winners!
What are your thoughts?
Grim

 

[nick 462]

I have a mate in the city who trades Forex for the banks........
All his words not mine but it does make you wonder if us 'tiddlers' ever stand a chance. I know there are a few people that make it but that could be down to randomness; if you have a sample pool large enough then there will always be a few 'lucky' winners!
What are your thoughts?
Grim

Luck should be eliminated from our game play. I've had as much good luck as bad today & made gains.
When I was learning agricultural mechanics my tutor asked me if i'd be "able to put it back together again?" [an MF135 Tractor], I said 'with a bit of luck'. He said 'It's skill, not luck'. The other day I was bleeding my old landrover & "luckily" had the right sized spanner [a cheap, knackered old thing one wouldn't usually use (for much!)], but it did the job. Good job I hadn't chucked it in a recycling bin!
Skill or luck?

 

[Yokiro]

One of the most important things you need to understand when you enter any of these markets, is that they all have their risks. You can lose all your money the very first day if you don't know what you are doing.

That is why it is HIGHLY recommended that you don't invest money into any of these markets that you cannot afford to lose. If you have an extra $25,000 that you could lose without any worries, then go ahead and invest into the market. On the other hand, if you have worked hard and saved $25,000 and that is all you've got, don't be stupid and invest it all on the market.

 

[Lee Shepherd]

Luck should be eliminated from our game play. I've had as much good luck as bad today & made gains.
When I was learning agricultural mechanics my tutor asked me if i'd be "able to put it back together again?" [an MF135 Tractor], I said 'with a bit of luck'. He said 'It's skill, not luck'. The other day I was bleeding my old landrover & "luckily" had the right sized spanner [a cheap, knackered old thing one wouldn't usually use (for much!)], but it did the job. Good job I hadn't chucked it in a recycling bin!
Skill or luck?

Great post nick,

Just to add,
Shallow men believe in luck, Strong men believe in cause and effect, but remember to be modest, the harder you work the luckier you get.