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CATHARSIS - CONFESSIONS OF WORST TRADING DAY


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CATHARSIS - CONFESSIONS OF WORST TRADING DAY

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  #1 (permalink)
windsor, Ontario
 
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There is a German phrase Schaudenfreude which roughly translates into receiving pleasure from someone else's pain. I do not think the English language curiously has an equivilent phrase.

Any how I thought it self therapeutic and perhaps enjoyable for others to share your worst trading day ever .
I will commence with a day that haunted me for years.

After six years of swing trading all commodities and making a descent buck - although suffering some big drawdowns - internet trading of the relatively new ES mini futures was coming into fashion so i thought I would give it a go. I joined Linda Raschkes - Trading room figuring this would be a safe way to navigate unfamiliar territory. This is sometime in the late 1990's I recall but not sure.

Anyways the favorite trade of the room was to fade the opening gap in ES. THe room moderator calls out a buy as we are about 10 points below previous close. So I buy two contracts. In a few minutes we are now fifteen points gap and the room says add to your position this is solid support. Reluctantly I buy a few more. A few minutes go by and we are now 24 points below yesterdays close and still falling. The tension in the room is palpable. No commentary from the moderator. I am stunned. I know at one point I am down $7000 or or more only 8 minutes into the session and we are still falling with no sign of support. I am not ready to eat this loss but I am certain I want to kill theroom moderator I have banished his name from my memory.

Anyways situation is not improving and I am desparate so brilliantly I decide I will hedge by selling NQ futures. I know less obout nq at this time than I know about es In fact NQ futures back then were larger per tick and literally were non stop volatility - The trading dome was also pathetic as stop orders had to be put in manually. So I put 2 nq contracts on and before I can even get my stop typed in the price has already blown way passed it. I panic and hit the close trade button. I am out $500 but my stop order did not get cancelled and now unreal price has reversed it my buy stop gets hit and I am filled long and losing money again already as price is plunging. It is surreal. I actually laugh out loud because I am in awe of my own stupidity. I hit close trade again and another $460 or whatever gone. THis took all of about 2 minutes. It may have been worse than that but you get the idea. I am momentarily actually feeling good because the relief of escaping my nq diversion took my mind off my bigger es nightmare.

I ended up trading something like 300+ contracts that day in bits and pieces over the session. Unbelievably I traded myself at one point back to even money but then my ego took over and I decided my first trade was right all along and went back long as we had retraced almost to the previous close and this was a classic Larry Williams oops trade setup. This ego driven I was right all along took over my brain and I then proceed to lose about $4,000 plus another $1,500 in commissions plus my nq losses After that day I did not trade for a month I was so pissed at myself and that was my last visit to a trading room. Hope you enjoyed it. Feels only funny now. but what a day! Hopefully others will come and share. Some of these days are the most educational. Repeat to self: I am not clever. I am not clever.

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  #3 (permalink)
the coin hunter
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drago1 View Post
.... The tension in the room is palpable. No commentary from the moderator.
....

are you sure? Linda/Terry talk a lot, maybe you just blocked them out.

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  #4 (permalink)
windsor, Ontario
 
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Thats it Terry! Mofo Terry and his nineteen charts. I will be back in therapy now Cory.

i WAS HOPING THAT OTHERS MIGHT STEP UP - APPARENTLY NOT.

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  #5 (permalink)
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My worst trades were not day trades. Mine were long term Fundamental trades.

I bought 3x ETF's around Dec 2008 while I was visiting in South America. They were all Bull ETF's and again 3X, stuff like DOW, Financials, Real Estate (UYG, URE, BGU etc..).

I plopped down about 100K to secure the trades and within 3 months low, I was down 85K (15K left) and I didn't think much of it. Oh, I bought General Growth @ 25 cents....

Anyways, come May I close out with a 15K loss (chickened out) and come December my investment would have been worth 500K+. (close to a million at market peak)

Now, I saw the turn in the market, I was a bit early and I used money that I could lose, but didn't want to part with for certain. Not worst day, but worst set of trades as my whole goal was to hold them for long term appreciate but I chickened out. So, I guess my worst trades were actually my exits...

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  #6 (permalink)
Market Wizard
Chicago Illinois USA
 
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respond here and maintain humility as well as not attract the wrong kind of attention?

I had a rho position, option "greek", that reacts to changes in interst rates on Tuesday Sept 11, 2001. The vega position which responds to implied volatility was also about as bad as it could be. When markets reopened the change in account net liquidation was seven figures...then we had that intra day suprise rate cut. That was not so much fun. Checking the sheets it was about 1.8.

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  #7 (permalink)
windsor, Ontario
 
Experience: Advanced
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Trading: Es, 6E
 
Posts: 139 since Oct 2009
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wldman View Post
respond here and maintain humility as well as not attract the wrong kind of attention?

I had a rho position, option "greek", that reacts to changes in interst rates on Tuesday Sept 11, 2001. The vega position which responds to implied volatility was also about as bad as it could be. When markets reopened the change in account net liquidation was seven figures...then we had that intra day suprise rate cut. That was not so much fun. Checking the sheets it was about 1.8.

Once heard an expression both meaningful and humorous " Beware of geeks baring greeks", today that is triple entendre.

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  #8 (permalink)
Market Wizard
Chicago Illinois USA
 
Experience: Advanced
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I do not understand your last post. What do you mean?

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  #9 (permalink)
windsor, Ontario
 
Experience: Advanced
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Trading: Es, 6E
 
Posts: 139 since Oct 2009
Thanks: 40 given, 124 received

An allusion to the story of the wooden horse of Troy, used by the Greeks to trick their way into the city. It is recorded in Virgil's Aeneid, Book 2, 19 BC:
"Do not trust the horse, Trojans. Whatever it is, I fear the Greeks even when they bring gifts."
in my play on words, is reference to the Ph. D. Nobel prize winners in economics ( geeks ) who created the Black-Scholles model for Options ( greeks ) that resulted in the Long Term Capital ( gifts )debacle that sucked in millions of investors savings and almost destroyed the markets. The triple implied joke is reference to derivatives written on Greece's debt. ( ergo - beware of geeks bearing greeks on Greece )

I am a bit cryptic - to say the least.

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