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I finally blew up an account


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I finally blew up an account

  #101 (permalink)
 
Sandpaddict's Avatar
 Sandpaddict 
Vancouver, Canada
 
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fxzen View Post
I just wanted to second this book. I've read all the popular psychology books, some many times over, and watched tons of videos from ones like Steenbarger et al, and this book blows them all away. It's not just a book about theory but gives you practical tools to build an system to improve your mental and emotional game.

Knowing why your emotional mind takes over doesn't prevent it from happening - you need to develop the emotional skills to identify the signals before it takes over and renders your logical mind useless, and this book can help you do that.

You need to do the deep work, this isn't a quick fix, but can give you the understanding, the tools and a plan to get there.

Unfortunately Blew I personally don't think you are there yet.

Please understand I mean no harm but based on your response to all the feedback it sounds like your going right back in with the same biases.

I have not read this book but check out the table of contents.

There are layers and layers of complexity to our behavior and you can't just WILL it away. It just doesn't work like that.

Many people, me included, suggest an absolute MAX position of %1.

I would even suggest %.5 MAX.

Remember... it's NOT your trading that's going to keep you in the game it's the ability to keep your capital intact to take the next bet.

No amount of WILL power will change anything. And science has proven that will power is a finite resource.

Like the great Daniel Kahneman has said (I paraphrase) "just because I understand certain human biases doesn't mean I'm any less susceptible to them".

Best of luck my friend.

Just my humble opinion.

Joseph

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  #102 (permalink)
zzzz2021
Toronto Canada
 
Posts: 73 since Mar 2021
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I'm not making this up and I hope this post would help those who are about or went through blowing up your account. I've to apologize first that my english is suck and I don't socialize much with people.

I blew up my first trading account only a couple of years after graduating from university from trading hi-tech stocks to nat gas. Money in that trading account was savings that I saved from years of working between jobs.

I then took few years off from trading to focus on learning more about technical stuff. I decided to begin to trade again this time from some of savings I had + my gf who lived with me for over a year. I only focused on day trading 2x leveraged ETFs that tracked the S&P500. For about two years of day trading these leveraged ETFs, I were able to make some 5 figures in return. I became overconfident and began to get greedy. Instead of continuing doing what I were doing at best, I began to trade only weekly SPY option once this product was available for retail traders like us to trade. I lost more than 6 figures in this account and blew it up. I thought of getting suicide for several times and I didn't have the courage to tell my wife that I blew the account (we married for few months after I sponsored her to live in Canada.) While I kept accumulating those losses, I took out more than $30k from my credit card and put it into my trading account without telling her. I thought I could make it back without her knowing it. Due to unstable mental, I lost them all. At this moment, I couldn't make fake smiles or pretend nothing happens to her, my wife noticed it within days and kept asking me what went wrong. A week after I blew my account, she figured out that it had to do with trading and that she wanted to see my trading account. I admitted the truth and I was very sure that she would divorce me (my eyes are tearing each time I recall that moment) and I was pretty sure that I'd kill myself once she left me. Out of my surprise, she told me that it was not a big deal and we could overcome it together. Fastforward to few months later, she worked for 2 jobs to support me while I went back to school to upgrade my skills because I couldn't find a job in my field due to outdated skills.

A decade later, I continued to master my skills in trading Futures instrument like ES/NQ, CL(crude) or GC (gold) by developing my own trading system to trade while working between jobs. This time, I began to become more discipline and I wouldn't hesitate to punish myself big if I break rules. It took me a decade to back-testing, forward-testing and improving some reliable strategies as well as eliminating those that didn't produce high winrate in the long term.
In the present, I'm slowly making it back but far from recovering losses from 13+ years ago. I sit down with my wife at the end of every month to review my trading performance and that I must be honest with her this time.

-------------------------------------------------

What I'd like to share with other posters here is that you have to document or keep a journal of every trade with an emphasis on losing trades. If the mistake is on me, then there must be some kind of punishments involved to make myself discipline again. If it has to do with breaking news that I wasn't aware of, there is nothing I could do about it. If I accumulate two consecutive losing trades from the same strategy, I'd begin to question why. I'll stop trading any strategy with 3 consecutive losses until I figure out how to make it work again.

IMO, having a journal would likely prevent us from gambling or digging a big hole to our account because it reminds us what strategy we're about to trade and rules that we've to follow. It also gives us a clear picture why some strategies work well in some specific market conditions, but not others.

Good luck everyone.

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  #103 (permalink)
redbarntrades
Kalispell=Mt./USA
 
Posts: 213 since Sep 2019
Thanks Given: 354
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Yep, losing your "earning" really does suck!

It's the price you payed for learning the next phase of being a trader.

Since you were not able to stop your losses, you had to have a kick up the back side to get your attention.

Some thoughts:

1. You did not BLOW up your account! You just gave back your earnings.
2. Now that the market has your attention, how are you going to deal with your revenge habit. There are plenty of resources out there which can help including many of the great comments that you have received.
3. Make it your goal to become a good trader not making the money. Yes, I know we all want to make the money but we all have to learn to play the game before we get payed.

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  #104 (permalink)
redbarntrades
Kalispell=Mt./USA
 
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zzzz2021 View Post
I'm not making this up and I hope this post would help those who are about or went through blowing up your account. I've to apologize first that my english is suck and I don't socialize much with people.

I blew up my first trading account only a couple of years after graduating from university from trading hi-tech stocks to nat gas. Money in that trading account was savings that I saved from years of working between jobs.

I then took few years off from trading to focus on learning more about technical stuff. I decided to begin to trade again this time from some of savings I had + my gf who lived with me for over a year. I only focused on day trading 2x leveraged ETFs that tracked the S&P500. For about two years of day trading these leveraged ETFs, I were able to make some 5 figures in return. I became overconfident and began to get greedy. Instead of continuing doing what I were doing at best, I began to trade only weekly SPY option once this product was available for retail traders like us to trade. I lost more than 6 figures in this account and blew it up. I thought of getting suicide for several times and I didn't have the courage to tell my wife that I blew the account (we married for few months after I sponsored her to live in Canada.) While I kept accumulating those losses, I took out more than $30k from my credit card and put it into my trading account without telling her. I thought I could make it back without her knowing it. Due to unstable mental, I lost them all. At this moment, I couldn't make fake smiles or pretend nothing happens to her, my wife noticed it within days and kept asking me what went wrong. A week after I blew my account, she figured out that it had to do with trading and that she wanted to see my trading account. I admitted the truth and I was very sure that she would divorce me (my eyes are tearing each time I recall that moment) and I was pretty sure that I'd kill myself once she left me. Out of my surprise, she told me that it was not a big deal and we could overcome it together. Fastforward to few months later, she worked for 2 jobs to support me while I went back to school to upgrade my skills because I couldn't find a job in my field due to outdated skills.

A decade later, I continued to master my skills in trading Futures instrument like ES/NQ, CL(crude) or GC (gold) by developing my own trading system to trade while working between jobs. This time, I began to become more discipline and I wouldn't hesitate to punish myself big if I break rules. It took me a decade to back-testing, forward-testing and improving some reliable strategies as well as eliminating those that didn't produce high winrate in the long term.
In the present, I'm slowly making it back but far from recovering losses from 13+ years ago. I sit down with my wife at the end of every month to review my trading performance and that I must be honest with her this time.

-------------------------------------------------

What I'd like to share with other posters here is that you have to document or keep a journal of every trade with an emphasis on losing trades. If the mistake is on me, then there must be some kind of punishments involved to make myself discipline again. If it has to do with breaking news that I wasn't aware of, there is nothing I could do about it. If I accumulate two consecutive losing trades from the same strategy, I'd begin to question why. I'll stop trading any strategy with 3 consecutive losses until I figure out how to make it work again.



IMO, having a journal would likely prevent us from gambling or digging a big hole to our account because it reminds us what strategy we're about to trade and rules that we've to follow. It also gives us a clear picture why some strategies work well in some specific market conditions, but not others.

Good luck everyone.

Wow! Perhaps you should change your name to "Overcomer"! You are testimony to others. When you married your wife, you did a very good thing. You are blessed to have such a woman by your side!

Many women would have ditched you as soon as they could. The fact that she has been supportive over all of these years, shows her love for you!

Stay on your path! Most of the hard yards are behind you! I am proud of your story!

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  #105 (permalink)
zzzz2021
Toronto Canada
 
Posts: 73 since Mar 2021
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redbarntrades View Post
Wow! Perhaps you should change your name to "Overcomer"! You are testimony to others. When you married your wife, you did a very good thing. You are blessed to have such a woman by your side!

Many women would have ditched you as soon as they could. The fact that she has been supportive over all of these years, shows her love for you!

Stay on your path! Most of the hard yards are behind you! I am proud of your story!

Most chinese parents are highly materialistic people and they would not hesitate to treat you like garbage as soon as they realize you're in financial trouble. It doesn't matter how well you treated them or cared for them.

For years, they tried to find ways to make her divorcing me by torturing her mentally and they even announced to disown her after her dad had a quarrel with me while they stayed in Canada for over a year. After that argument, they went back to China and ever since then, her dad never talked to her and he past away three years ago in China due to terminal cancer. Her mom only talked to her recently and allowed my wife to see her recently in China before Covid-19.

I came from a poor and big family and we immigrated to Canada from Vietnam in 1990s. I had to work for all kind of part-time jobs while attending high school to support my family as a young male. I never had any financial support from my parents in my life. For many times, I wish my parents never gave birth to me at all.

Yes, you are right that I'm lucky to have a supportive wife. That's the only luck I've in my life and it really makes me to feel much more stressful if I can't do well financially.

----------------

Okay, I'm done with posting my personal story on this thread. Sorry OP.

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  #106 (permalink)
 
Sandpaddict's Avatar
 Sandpaddict 
Vancouver, Canada
 
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delux9 View Post
When I started trading I had boom and bust results. Turns out when I dug down, my strategy was not as good as I thought it was. If I took a trade and was right, great! If I was wrong I doubled down until I was right. The nice thing about this is it makes money most of the time. The bad part is one day you blow up your account in 15 minutes.

There’s a lot psychologically to unpack here as others have eluded to but one thing I will echo is to set a daily loss limit with your broker. There’s absolutely no reason not to. If the most you’re willing to lose in a day is $1000, set it at $1000. Or if you hate having a daily loss limit, think it’s pointless, and the most your willing to lose is $1000, set it at $2000. At least that way if you hit it, you know you really screwed up. Better than losing 10x that. It’s possible for the best of us to have months of discipline, then one day go on full tilt, chimp mode, etc. One interesting thing I’ve noticed about myself is once I set a daily loss limit, I’ve hit it only a handful of times in years. I think it keeps me honest knowing I need to stick to a plan and use risk management rather than doubling down and sizing up until I’m right and “get back to even”.

I never thought about doubling my risk as a way of convincing myself to do it.

If I want a max $1000 daily loss. I'm very unlikely to tell my broker to cut it there as I would be upset if I got close it and came out.

So starting with the $1000 reference point once you get to $1200... $1400... $1800... which of course you probably will you can really curse yourself all you want as you will be beside yourself with your stupidity to let it run past $1000.

The great psychological trick here is you can get your brain hating yourself at much smaller amounts of capital. Signaling to your brain the need for correction.

And if you hit that $2000 then you know you should stop to take a look at yourself but at least you survived to play another day.

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  #107 (permalink)
redbarntrades
Kalispell=Mt./USA
 
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zzzz2021 View Post
Most chinese parents are highly materialistic people and they would not hesitate to treat you like garbage as soon as they realize you're in financial trouble. It doesn't matter how well you treated them or cared for them.

For years, they tried to find ways to make her divorcing me by torturing her mentally and they even announced to disown her after her dad had a quarrel with me while they stayed in Canada for over a year. After that argument, they went back to China and ever since then, her dad never talked to her and he past away three years ago in China due to terminal cancer. Her mom only talked to her recently and allowed my wife to see her recently in China before Covid-19.

I came from a poor and big family and we immigrated to Canada from Vietnam in 1990s. I had to work for all kind of part-time jobs while attending high school to support my family as a young male. I never had any financial support from my parents in my life. For many times, I wish my parents never gave birth to me at all.

Yes, you are right that I'm lucky to have a supportive wife. That's the only luck I've in my life and it really makes me to feel much more stressful if I can't do well financially.

----------------

Okay, I'm done with posting my personal story on this thread. Sorry OP.

I speak to you as one who is probably old enough to be your father. I have to say that as a father, that I would be proud of you and your wife! I told my adult children a decade ago that they have to PROVE their own life. Prove what they are made of. Prove who they are as individuals. Prove their own virtues and talents.

Your wife has shown herself to be a woman of virtue by standing by you through difficult times and pressing on to better times.

You both can count your own blessings. Name them one by one. Enjoy them.

The behavior of other adults (even family members) is beyond our control. They have to own up to their own actions. I hope your wife can rest in the fact that she has done right by you and it will pay off in the long long road of life. Money, is just a necessity. It does not define us. The virtues that you both have shown is far more valuable that gold.

Thank you for your honesty. I'm very glad to have corresponded with you!

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  #108 (permalink)
 ASU2 
Jacksonville, FL
 
Experience: Intermediate
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Trading: ZB
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Sorry to hear about your experience. It's painful. I know. I was averaging $1k/day trading 10 contracts in ZB. All I was taking out of the market was 3-4 ticks per day. Simple. Then things went south. Sometimes a good, clear entry signal turns against you. The market trades several times at your target price and your order doesn't get filled. Feeling so sure I was right I expanded my stop, only to take a bigger loss. Started revenge trading. Never works. Welcome to the club. It''s a very large one. Sorry if I sound facetious, but you should not feel alone.

I learned never to expand a stop. Only move stops to BE and/or trailing your position. I took a vacation. Revenge is an emotion. I had to wait until I could trade without emotion once again. And even when I came back and sustained a losing trade, I stopped trading for the day. After awhile I accepted my stop losses as part of my pretty good win %. Your situation is anything but hopeless. Good trading.

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  #109 (permalink)
 
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 Sandpaddict 
Vancouver, Canada
 
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glennts View Post
Quit your whining and get back on the horse. Nobody said it was going to be easy. The good thing is that while most people will blow $60k through an endless series of operator errors stretching over many months or years because of denial and an inability to learn and improve, you got it all over with in a few days. Think of all the time you have saved.

Going to spare you the sophistry because you know how you screwed up and you obviously have the skills to get back on track but I do have one suggestion.

If you pay your taxes quarterly, that is a good time to pull profits out of your account and do a reset of your trading account balance. You've just had a reset to $10K so when September rolls around, pay yourself for all your hard work and reset to $15k. Next quarter reset to $20K. This will allow you to increase size as you demonstrate competence and self-control while at the same time having a circuit breaker in place for the next time you lose your mind.

Without that withdrawal all profit is theoretical.

Good luck.

Wow ok.

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  #110 (permalink)
feinbern
London
 
Posts: 7 since Jan 2021
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I hate to keep harping on about automation but I just don’t understand why people don’t do it. It’s kind of an obvious question and one that I asked myself after taking heavy losses over a long period of time. If you’re supposed to trade without emotion then inevitably you’re following a certain set of rules (many good ones have already appeared on this thread). If you’re following a certain set of rules then one way or another they can be automated. If you are trading on “gut instinct” or emotion then I guess that can’t be automated but that doesn’t seem the right way to go... Either way you just need to figure out what you’re trying to do and do it.

The other HUGE benefit of automation is that you can empirically back test and prove the concept over a long period of time which you just can’t do with discretionary trading. That actually helps you get through drawdowns (which you’ll inevitably get with automated strategies as well) as you’ll feel confident it’s probably a short term blip (obviously always subject to your “system stop loss” that you must have in place from the beginning). It’s just a much easier way to do things than being glued to your screen all day trying to see trades that a computer can do on its own with a little bit of effort on your part. In the old days they didnt have this luxury but now pretty much anyone with a computer can do it (and much more besides). Some pretty heartbreaking stories on here (and mine hurt a hell of a lot too) but you have to get the right advice to avoid repeating the same mistakes. Good luck

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