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Account blown up
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Created: by Big Mike Attachments:2

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Account blown up

  #61 (permalink)
Market Wizard
virginia
 
Futures Experience: Intermediate
Platform: ninja
Favorite Futures: ES
 
cory's Avatar
 
Posts: 5,218 since Jun 2009
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pipandrun View Post
I had and it only happens with live trading...to overcome this is a step forward...

...

Y that was when a French brokerage liquidated their bad trade overnight. His recording is also very much inline with the guy who got shot but he had to posted a snap of his wound first before getting to the hospital.

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  #62 (permalink)
Elite Member
Detroit, Michigan, USA
 
Futures Experience: Intermediate
Platform: NT7 w/EW and MG
Favorite Futures: CL and ES (sometimes)
 
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Posts: 60 since Jun 2013
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Big Mike View Post
Definitely wrong.

There is probably a 0% chance I could pass a TST combine. But I 100% make money, for real.

Combines can be useful, but they don't make you profitable, nor do they serve as "black/white" lines for who can be profitable and who can't.

And after running the forum for nearly 6 years, I don't know many people that aren't profitable on SIM. So I think that argument is basically pointless.

Mike

Agree here Big Mike, it really has nothing to do with anything. The combine is someone else's parameters and not your own. I have have been very profitable in the past operating in a completely different set of parameters than the combines. While I found the combine almost impossible to pass due to my learned trading process. The only thing I can say, is that passing a combine shows that you as a trader have the ability to be versatile. It is only just one more tool in the tool box, that is all.

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  #63 (permalink)
Market Wizard
Boca Raton
 
Futures Experience: Advanced
Platform: Variety
Broker/Data: Optimus Futures, LLC
Favorite Futures: Futures
 
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blb014 View Post
Just curious who are these opponents?

There is a crowd behavior that is typical where early adopters come into the market in the early stages of the move. As the move extends, you have the late majority that is coming in and tries to take advantage of a move that is over or about to be over. This is the cumulative nature of the herd instinct. Odd lotters feed the smart money.
Good traders, in my personal opinion, not only understand their method, but also the ability to read how inexperienced traders will behave under those circumstances.

inexperienced traders love using terminology and always throw around the "positive expectancy", "let your profits run", etc. while the real context that it is done within and the big picture is lost. All those terms are fine, but they have a lot more depth in the context of reading the market right. Try and get your advice from people who actually trade, it adds a new color to trading.

Matt

There is a substantial risk of loss in futures trading.

PM with any questions about optimusfutures (800) 771-6748 (561) 367 8686. THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING.
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  #64 (permalink)
Trading Apprentice
London, UK
 
Futures Experience: Master
Platform: Interactive Brokers
Broker/Data: TradeStation
Favorite Futures: Portfolio ETFs
 
Posts: 13 since Jun 2014
Thanks: 5 given, 16 received

It's common for people to think they blew up their account because they had yet to learn how to trade. However, it's generally because they had yet to learn how to position size.

Once you have a solid grasp of money management, then even with a win rate of zero you won't be able to blow up your account - as your account equity diminishes then so will your position size, until your position size becomes zero units. At that point, you're no longer able to trade, but you haven't lost all the money in your account.

Many hedge funds are obliged to cease trading once they incur a drawdown of 50% or more - the individuals and institutions investing in them shouldn't lose more than half of their funds that way (barring some kind of liquidity crisis preventing valuation and exit of positions).

Although there are sophisticated mathematical approaches to anti-martingale position sizing, the core rule is very simple: bet less when you're losing. As your account equity falls, de-leverage.

Hope someone finds that a useful distinction to keep in mind!

Nick

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  #65 (permalink)
Trading Apprentice
Singapore Singapore
 
Futures Experience: Advanced
Platform: X-Trader
Favorite Futures: Nikkei 225 Futures
 
Posts: 17 since Dec 2014
Thanks: 17 given, 59 received

3 Wiped Outs, 2 Near Misses, Million $ Floating Loss Exceeding Net Worth

I lost control and blew up my trading account 3 times.

I started trading SGX derivatives full time from mid 2004 with S$200K capital after being retrenched at age 42 from my Engineering job with Chevron in Singapore. 1 USD = 1.37 S$ (SGD).

I made money 7 out of the last 10 years. My total net profits from 2005 to 2014 is about S$1,288,000.

On 15 Feb 2007. I lost S$191K trading SGX MSCI Singapore Index futures. After trading for 2 years, I had zero profits and about S$70K of savings left to support a family with 2 young kids. Lowest point in my life.

On 30 Apr 2009, I lost S$224K trading SGX MSCI Taiwan Index futures and another S$116K the next trading day on 04 May 2009. Total S$340K in two consecutive trading days. I surrendered my life insurance policy the next week, and an investment condominium a month later, to raise additional trading capital after the loss.

On 16 Nov 2012 I lost S$570K trading SGX Nikkei 225 Index futures. Although my trading account was not completely wiped out, unlike the previous two major losses, I forced myself to take a temporary break from trading to reassess my situation. As a result of this major loss, my net trading income over the last 6 years, from 2009 to 2014 is next to nothing.

There were two other "near miss" trading days where my trading account had floating losses that exceeded my trading capital but the market recovered and I had profits at the end of the trading session.

On Tuesday 15 Mar 2011, after Japanese Prime Minister Naoto Kan said a “substantial amount” of radiation was leaking from a nuclear power plant affected by the Mar 11 massive earthquake and tsunami, the floating losses on my Nikkei 225 long positions touched S$2.5 million, roughly twice more than what I had in my trading account. At the end of the trading session I made S$120K. It was the most frightening day in my life, more scary than the time I got robbed at gun point in Phnom Penh a few years earlier.

I continue to trade daily, with a S$100K account presently, focusing mainly on Nikkei 225 Index futures. My daily profit seldom exceed S$500 per trading day, nowadays.

I am 100% certain I can lose every cent in my trading account again.


Last edited by JacLau; March 26th, 2015 at 12:32 PM.
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  #66 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,727 since Jul 2011
Thanks: 794 given, 4,777 received

I blew up my account twice. First time was 1998 just a couple of months after starting trading. Didn't have enough cash excess.

Second time was 2008. Just kept saying to myself this thing can't go any lower.

But I have done very well the other years. Trading is my sole source of income and I'm debt free.

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  #67 (permalink)
Trading for Fun
New Zealand
 
Futures Experience: Intermediate
Platform: NinjaTrader
Favorite Futures: ZB
 
Posts: 92 since Jun 2013
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Branzol View Post
Biggest thing I experienced going from SIM to REAL was the fact fills in SIM are no where near how they work in real life.

Examples:

Stop-Loss on Simulation: On simulation you can set your Stop-loss the market hit's it and your trade is closed out. Don't we all wish this is how it really happened?

Stop-Loss on Real Trades: I've had Stop-losses set and Market momentum drive right through my price point and fill 20 ticks away in the past. It's the nature of the beast especially on high volatility instruments. I've had it happen to a lesser degree on some of the calmer instruments.

Limit Order on Simulation: You can set limit orders on simulation, and when the market comes to that price point your filled near instantly. Again this is nowhere near how it happens in real trading.

Limit Order on Real Trades: You have to set your order many price points in advance to get a near instant fill on a limit order when the market hits your price point. Again it will depend on the instrument and liquidity in that instrument. But I've had to place orders 6-8 ticks out thinking ahead to ensure I had a order that was first in the batch to be filled. Simulation cannot teach you these things. I've also had Take-Profit orders hit there price point, not fill go back down and turn into losing trades. I've since solved that by other means as back up protection to juts a TP order.

There are many other examples, but those are the two basic ones. Pretty much the concept you need to grasp is your fills on simulation are instant. In the real world they are not! My suggest to anyone who's been trading SIM is try a few trades on a micro future like m6e and just sorta start to grasp how the fills occur. Only reason I suggest M6E is the capital involved to place a contract is low, as is the dollar amount per tick.

The Live fills can actually be better than SIM. This really varies depending on the simulator fill engine you are using based on the platform and also the platform simulator settings. But, you can set it up so the fills are very realistic. I have actually had slightly better fills live than on SIM with Ninjatrader.

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  #68 (permalink)
Elite Member
Dallas, Texas
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: AAPL, /ES, IWM, SPY Options
 
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ron99 View Post
I blew up my account twice. First time was 1998 just a couple of months after starting trading. Didn't have enough cash excess.

Second time was 2008. Just kept saying to myself this thing can't go any lower.

But I have done very well the other years. Trading is my sole source of income and I'm debt free.

Yep 2008 and early 2009 made me question the conventional wisdom of investing. It will probably happen again, right before I retire

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  #69 (permalink)
Elite Member
Dallas, Texas
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: AAPL, /ES, IWM, SPY Options
 
Posts: 208 since Oct 2012
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BestBrokerDeals View Post
It's common for people to think they blew up their account because they had yet to learn how to trade. However, it's generally because they had yet to learn how to position size.

Once you have a solid grasp of money management
, then even with a win rate of zero you won't be able to blow up your account - as your account equity diminishes then so will your position size, until your position size becomes zero units. At that point, you're no longer able to trade, but you haven't lost all the money in your account.

Many hedge funds are obliged to cease trading once they incur a drawdown of 50% or more - the individuals and institutions investing in them shouldn't lose more than half of their funds that way (barring some kind of liquidity crisis preventing valuation and exit of positions).

Although there are sophisticated mathematical approaches to anti-martingale position sizing, the core rule is very simple: bet less when you're losing. As your account equity falls, de-leverage.

Hope someone finds that a useful distinction to keep in mind!

Nick

Excellent post

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  #70 (permalink)
Membership Temporarily Revoked
detroit+mi/usa
 
Futures Experience: Intermediate
Platform: Neenja
Favorite Futures: Trumpet
 
Posts: 18 since Mar 2015
Thanks: 13 given, 6 received

Exceptions to the rule



Big Mike View Post
Guys, I wanted to start a serious discussion about a real and common problem -- traders blowing up accounts.

"Blowing up" means you took the account down to basically zero, where you couldn't place a trade any longer, or something similarly devastating.

As I posted on my first post ever on futures.io (formerly BMT) nearly 6 years ago, I have blown up a couple accounts in my day. None for many years thankfully, but it has happened. I view it as part of the learning experience, and naturally in hindsight it would be very easy to see why I blew up, and that I deserved it.

You can't expect to make poor trades and be consistently profitable.

I am starting a poll as I don't think I've ever asked the question on futures.io (formerly BMT) before. Everyone can vote anonymously on the poll, but if you wish to share your story about blowing your account and what you learned from it, please do so in this thread.

Mike

Do you personally know any successful traders(years)who have never blown an account? I've been reading/studying for half a year now, and it seems that blowing up an account is an active choice on the part of the trader. You have to willingly ram your face into a streak of losses to actually end up at 0 or below. I really don't understand that. Or is there just several trades where the trader decides to risk it all?

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