Account Destruction.

Discussion in 'Options' started by PurpleOne, Oct 1, 2011.

  1. PurpleOne

    PurpleOne

    Hi all wanted to post and see if I can garner any advice from traders with more experience and skill than myself. I'm really in a bad state of mind and feel hopeless. I was trading credit spreads for last few years with relative success. In the last four months I've taken account from about 300k to about 75k. Brutal I know. My position size was much to large and made lots of stupid mistakes.
    My question is should I just stop trading or continue to try and refine my skills. Was using money to live so you can imagine I'm in quite a state of fear and misery.
    Thanks for input.
     
  2. daveyc

    daveyc

    i'm sorry to hear of your losses and i really mean that. i called it quits with a loss of 12k but your losses are staggering! i know this is a trading forum and everybody made their millions in the market but i got to be brutally honest with you, time to call it a day and hang on to your remaining funds but you already know this.

    anytime there is a massive increase in volatility like we have now or have had with the flash crash or the '08 crash many traders find themselves in your current situation so surely you are not alone today. there are probably more than just a few on this board that are in the same situation not knowing what to do and where their money went and why they were so foolish.

    not all stategies are for all markets. credit spreads are a negative vega trade and when you have a market like we have today its going to dessimate those type trades. we all make mistakes and i hope you find a new direction.
     
  3. PurpleOne

    PurpleOne

    Yeah thanks for input I guess your right. I am better off calling it quits.
     
  4. what trades/strategy caused drawdown?
     

  5. Credit Spreads + Chart Below = Drawdown


    [​IMG]
    3 month chart for overall market
     
  6. nkhoi

    nkhoi Moderator

    check out neke thread plenty of opinions there just pick one make sense to you.
     
  7. hlpsg

    hlpsg

    Sorry to hear about your losses. I think you should definitely stop trading. You won't be refining any skills by trading under these conditions.

    If I were in your shoes, I'd try to get a job and find an alternate means to make a living. In the meantime, I will record down all the data that I will need to do a post-mortem later on, and just totally put trading aside for now.

    In 6 months to a year when you've calmed your nerves and you can think with a cool head, come back and do a detailed study to see what went wrong. Is the strategy the problem? Does it even work under different market conditions, or does it crash and burn during volatile times, like now? Or is position sizing the issue? Or risk management? Or discipline issues?

    Only trade real money again when these things have been figured out. I wish you all the best.
     
  8. How much did you make before taking the drawdown?
     
  9. You are not in the suitable mental state to resume trading now. Stop--> take a vacation for a month or two--> review/refine your method on paper---> Trade again with an amount of money that you really do not depend on.
     
  10. With your present skillset and current state of mind, you have no business trading. Even more so if you were dependent on that money for everyday living.

    If you decide to continue or resume at a later date, you need to improve all aspects of your approach, especially your money mangement/risk control. But if you're not the "learn from your mistakes" type, give it up. If you can't, then it's a different problem.
     
    #10     Oct 2, 2011