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I finally blew up an account


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I finally blew up an account

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  #181 (permalink)
 polomora 
Antwerpen Belgium
 
Experience: Intermediate
Platform: IB, Amibroker
Trading: Emini ES
 
Posts: 6 since Dec 2018
Thanks: 33 given, 6 received

I've been following this post with great interest, many thanks to all who have contributed.
As I am not yet profitable, I'm not sure I am qualified to contribute further.

I've been trading ES for more than two years. Although I am not yet profitable, I have managed to avoid blowing my account. The techniques I use now are
- risk a max 0.25% of my account on each trade
- max daily loss of 1% of my account
- never lower/raise the stop (for long/short positions)

I have developed my own trading platform on top of Amibroker. Thanks to this, I have been able to implement these checks in my coded implementation. My biggest temptation is to change the code during the trading day to bypass these checks when I'm down on the day.

Like many here, still learning to avoid the issues of taking emotion-driven trades with bad positional location, and FOMO.

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  #182 (permalink)
MaverickV71
Vienna, Austria
 
 
Posts: 3 since May 2021
Thanks: 6 given, 20 received

If you're a trader, have you noticed that some days your "method" works better than others?

Have you noticed that a nice smooth trending day is followed by a rough, choppy day?

Have you ever had a bad day, spent the night seeing what you should have done, then done exactly that the next day and lost money again, only to realize as you analyze your charts yet again that your original method would have worked perfectly that day again instead?

It's part of the mindgame in that what psychologists call 'recency' is our undoing.

The pain of the losing day is so ingrained, nay, etched into your soul that you think you'll never forget it...and you cling to it.

So what should you do?

A mindtrick that works for me is to understand and accept that no consecutive days have the same behaviour. Therefore, the method for the day needs tweaking. How? Change timeframe, up or down. Most beginners would do well to trade a higher timeframe.

Let me know your findings and thoughts.

The OP (and others) is likely to benefit from this discourse.

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  #183 (permalink)
 Analytic 
New York NY/United States
 
Experience: Advanced
Platform: TOS NinjaTrader Jigsaw
Trading: Futures, Options, Stocks
 
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Posts: 44 since Dec 2013
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blew View Post
So I just need to get this off my chest. I just gave away all my gains on the year. I went from 7k -> 70k -> 10k. I blew most of it revenge trading and taking too big of position sizes. I got so comfortable scaling up as I was profiting consistently, and I threw it all away in like 10-15 trades. All the work I put in.. day and night studying all the styles of trading, figuring out what worked for me and what didnít, and I blew it all within a few days by emotionally revenge trading and scaling up higher as the losses got deeper. How could I be so stupid?! Iím still in disbelief I blew an account. I was happy to be one of the ones who didnít blow up an account because I remained disciplined enough to run up basically 1000% in 5 months.

I canít bring myself to tell my spouse. She would be really supportive I know it, but I canít even face myself at the moment, let alone have to explain what happened. Disgusted with myself. Utterly disgusted. I canít believe I let myself get so emotional and out of control. What in the fuck was going through this dense skull of mine?! My confidence is shaken but itís not at the same time. Iím confident that I just made 1000% in 5 months, and Iím also confident I just blew that 1000% in 3 days. So what does that really say about me as a trader... that Iím probably not too good Iím thinking.

The problem is trading is now apart of my identity it feels like. I love it but right now I hate it. Before a 4K swing up or down was no big deal, cause Iím some big shot or some shit I guess. But now 4K would axe me for good damn near. I want to give up but I donít cause I love trading. What can I learn from this? Donít revenge trade. But I knew that. I knew it while I was doing it and I know it now. So why didnít I fucking stop?? I donít know what to do from here.

one question: What was your risk mitigation plan?

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  #184 (permalink)
travelbrit
nantwich chesire
 
 
Posts: 5 since May 2020
Thanks: 19 given, 7 received

This is such good advice, after a few blowups, I realised as well that my issue was not letting the trade play out causing my risk to reward to be below 1:1 meaning added stress to keep my win rate above 50%.

Chris


striveforwisdom View Post
Hi blew,

I guess my first question is what does your system look like (not the methodology - as that would be giving your edge away) but the metrics? What is the win rate? What is the reward to risk ratio? I am asking because I think most blowups occur due to these metrics being forgotten, not having/sticking to your system, and not following the general rules fo successful trading that curb against your human nature - greed, fear, impulse, and revenge.

I think this because of my own experience blowing up an account. I blew up an account because I had a high win rate system that had a relatively bad reward to risk ratio for myself. Sometimes I would have a 1:1 reward to risk ratio and sometimes a .75:1. The reason I am bringing this up is because I think high win rate systems, at least for me, are detrimental for most people in the long-haul. Eventually there will be a day like you described. Where your emotions are uncontrolled and you have a bad day. In response to this 'bad day' some people, because they are so used to 'winning' from their high win rate systems will take this personally and start the following: revenge trading, taking more size than normal to recoup losses, creating more losses, then they are taking more impulsive bad trades resulting in them decimating an account. This happened to me.

From your post, it seems like you had a winning system for a short amount of time, were used to winning, and then had a bad day that got the best of you. My advice would be to go back to the drawing board. Reflect, analyze the experience, and redraw a new system that you will have to test with experience. Also, read on this forum, books, and/or ask people what rules they have in place to help them block against their destructive human nature - impulse, greed, fear, and revenge.

After my blowup, I realized a high win rate system with a low reward to risk strategy requires so much work/stress day-to-day and keeps me from inviting risk. Risk is great as long as you manage it, like what most others are saying on this post.

My current system has roughly a 50% win rate. I lose around 50% of the time, but I lose 2-3 times LESS than my profits. I only trade NQ. If my bearish conditions for NQ are met, I trade short and my system tends to get a reward to risk ratio of 3:1. If my bullish conditions for NQ are met, I go long and my system tends to have a reward to risk ratio of 2:1. So, I take great advantage of bearish conditions and a good red day. I am more cautious in bullish conditions because I know that I, myself, and my system are more profitable in/from bearish conditions and nice red days.

I illustrated some aspects of my current system above because, from my own experience, account blowups while initially unpleasant can be great. My blowup made me realize I was a shit trader without a clear system. I also didn't have rules in place to guard me against myself. Pre-blowup I was also way TOO risk adverse - which I personally think is a terrible way to go about trading. I believe it is essential to manage risk but to also not be afraid of it.

Another key lesson I have learned is that learning how to be comfortable losing is one of the key skills a trader must acquire and this is MUCH easier said than done. This is has been the hardest lesson for me and many other people. Get used to it and know that losing trades, with well defined and managed risk, are GREAT trades. Just because you take a loss doesn't mean it is a bad trade. Our human nature wants to trick us into thinking that a loss is BAD and a win is GOOD and, in my humble opinion, high win rate systems can easily push someone into this box of thinking.

Growing an account from 7k to 70k is commendable mate. Remind yourself that you can trade and do this. Just keep those emotions in check, take a break, and go back to the drawing board. Im telling you, you won't regret reflecting on this experience. Journal down what went wrong. Journal down what went right when you took your account from 7k to 70k.

Ask yourself: Is the system I am currently running really sustainable? Do I have rules to curb against my own human nature? Am I treating the market like an annuity - causing me to trade every day when there isn't necessarily good opportunities? I feel like these general questions, with honest answers about yourself, can really tell you a lot about yourself as a trader. Then, with this information, go to the drawing board and try something more concrete.

Above all, account blowups are a learning experience and usually, for the people that stick around and put in the effort, are a necessary step to make them the best trader they can be.

Cheers!


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  #185 (permalink)
ArmaTrader97
Sarajevo, Bosnia and Herzegovina
 
 
Posts: 5 since Jun 2021
Thanks: 0 given, 1 received

I blow my account many times and after 10 I stop counting how many times I blow account, all because I was not discipline, consistently, patience and moderate emotions.

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  #186 (permalink)
 Adolpho911 
Amsterdam + Netherland
 
Experience: Intermediate
Platform: PRT probably Edgeclears
Broker: (PRT.) Edgeclear Rithmic
Trading: Emini ES, Nq (Dax when Rithmic get euro data) futures only
 
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Posts: 15 since Jan 2020
Thanks: 104 given, 16 received

I might not said it clear. This is an obvious fake account and atleast the owner of the original post was online may 1st and third. Logged in 3?times these days. Not saying that it isn't a subject to discuss. But I wouldn't give specific advice to the poster as it most likely is bull along with the accent. Look at the profile.

(i specially think of those believing that "the account" claimed it made his account double 3 (and a bit) times in a very short time (i don't remember, ridiculous short time).

I claim the result (if it had been real) proves "the account" is not capable of making money. To get your account to increase so much in so short time, you have no consistency, no risk management and no setup. The people saying this results proves "the account" can do it again, is like argue that if you won a powerball lottery once, you can do it again.

Just saying and not drawing in other stuff. The story is fake and so is the account. Why makes no sense. Bad joke maybe. But regarding my argument, the posts claiming OP has the skill is kinda funny regarding my lottery allegory (I think allegory is right, I only have English as 2nd/3rd language)

I checked the time. It all happened this year before may. So ALL THE HOURS AND WORK finding out what worked trading from 7k to 70 k to 0 was during 4 months. I imagine this must be maybe 100hr studies... (Most would be before trading so I probably is guess to much. (I f this were true, which I can easy pay 100 $ to actually see the account statement...not making it more so that it is believed. Actually I promise to make the account that posted this an elite account. And personally learn the person risk management.)

Adolpho911
"Faith does not always let you fix the tuition fee; she delivers the educational wallop and sets her own bill" Jesse Livermore
"I am not curious when I know everything" Adolpho911
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  #187 (permalink)
Cutloss
Midway florida
 
 
Posts: 238 since May 2021
Thanks: 66 given, 116 received

Welcome to the club! If you have never blown up an account or allowed the auto margin to exit your account then you have never really learned about yourself. I hope your account wasn't large. I typically open very small accounts and even after making money always pay myself so I'm not tempted to trade too big.

DONT BE TOO HARD ON YOURSELF BUT DONT FORGET IT EITHER. MAKE CHANGES

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  #188 (permalink)
leeannecarrier
North America/USA
 
 
Posts: 5 since Jun 2021
Thanks: 0 given, 2 received

Revenge trading is something that can be extremely dangerous and can incur a huge volume of loss. It is best to follow a very strict exit strategy.

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