I would not say I have "blown" an account in pure $ terms, but twice in my 20's I tried to day trade stocks and ended up with 'buy & hold'. (or bought & hope).
First instance I was just excited about the tech boom and I had friends making money (or so they said), I really didn't know anything and RSI/MACD was pretty cool!
Second attempt was a few years later, I had spent 6 months learning as much TA as I could, I thought I had it, and I wasn't going too bad, but really didn't have a concept of risk management or a predefined stop-loss, so when some trades went against me I just held & held waiting for them to come back.
Fast forward to the end of 2013 and I was interested in trading again, happened across this site and have now spent 1 1/2 years studying the content and webinars (I think even full time, it would take close to 6mths to get through everything in here).
So thankfully I have been spared many of the trials of others learning through their experiences. I hate to think what I would have done with leveraged investments the first two times around...
Last edited by amoeba; March 24th, 2015 at 11:45 PM.
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Had blown my Lind-Waldock account trading commodities futures way back in 1998. Was a few years out of college and working at the operations group of a foreign investment bank. Basically, had a lot of free time, so started swing trading in Swiss Franc, pork bellies, live cattle, corn, etc. using some indicators I bought from some chart data provider.
It was all luck and no skills. This was how naive I was back then. I'd entered into a long position in the Swiss Franc a few hours before I left work. Planned to close the position the next morning for a quick profit. After I'd finished my reports the next morning, I checked the Swiss Franc 5 minute chart on the Bloomberg Terminal. I was perplexed/surprised that there were bars painted from 4:01PM the prior day to 9:29AM the current day. I thought the markets were closed during that time frame. Luckily, the trade ended in a profit.
Over a couple of months, I was able to increase my account from the initial $10k to about $15k, before greed and overconfidence did me in. One morning, after I'd finished my usual morning reports, I checked the live cattle chart and decided to go long. However, instead of the usual 2 contracts, I went in with 5. I got in at around 10:00AM. A few minutes later, my account was up to $17k (+$2k on the trade). Nature called, so went to the restroom to take a leak. Returned to my desk 5 minutes later and saw my account balance had dropped to $15.5k. I literally pissed away $1.5k. Should have bailed and taken the +$500, but didn't. Hoped to close the trade, once it goes back to +$2k again. Account now at $14.5k. Should have bailed and taken the -$500, but didn't. Hoped to close the trade, once it goes anywhere near positive. Account now at $13k. I couldn't believe it. The trade went from +$2k to -$2k in about 10 minutes.
Decided to average down with 5 more contracts, then minimized my trading screen and walked away (did some actual work). Got a margin phone call later in the day from my broker closing my cattle positions. A few weeks later, I closed my account with about $1.5k left.
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Agree with that, especially on longer term trades and options. Simulation, paper trading on TOS, lets someone see what type of risk is involved and how to react and roll options. Paper trading has definitely helped and I probably would have blown my account (since 2005) without it.
I don't know of Sim would help with trading futures intra-day though, faster trading, unrealistic fills, and the emotional roller coaster involve in intra-day trading.
Not exactly that simple though. Who knows the reasoning behind a retail, institutional, or hedge fund trades. Maybe the contract or share traded was a win-win for both parties involved.
Just my personal opinion from mentoring a few individuals over the years. The only trades someone can control are their own, and the mindset of trading and investing as a competition is destructive for someone new to the market. They focus on other traders and investor results and when they can't emulate those results they either blow up an account or just quit from frustration.
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Yea, I didn't mean it literally. The trader you traded with could also be profitable. You don't buy and sell from the exact same trader. You buy from one, and sell to another. Hence, your trade being profitable does not rely on the other traders trade being at a loss.
BUT, considering the % of players who are long term profitable, It's more like for every win, there are 5 losses...
Anyway, that's another thread.
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