Huge Losses

Discussion in 'Trading' started by Ripley, May 11, 2005.

  1. I am just curious. Do experienced and successful traders still have huge losses?

    I am supposed to limit my losses to -10 pts, or -$50 on the YM trading just 1 contract. But I ended up taking a -$960 loss today with a 3 contract position.

    Can somebody help me with how I could overcome this.
    I took a -$660 loss on a two contract position last week also. Thus, usually my hard work for the whole week is wasted away in one or two trades. I usually make 30 RTs per day if that helps.
  2. ozzy


    Yeah when I forget to put in my stop loss. :D

  3. I think you should get out earlier:)
  4. ozzy


    Are you using stops? Seems like your not and if you are its as loose as a girl named shaneney down by the corner.

  5. You say you're "supposed" to limit your losses to $50/ctr, so you should not have lost more than $150 on 3. So where did the $960 come from?
  6. Set a certain loss amount as your action point, for me, that point is $1000 per position, that means I will take action at this point to limit my losses. I have a flexible stop plan, and for me this point is like a "warning shot across the bow" rather than an absolute stop. I might consider doubling down here, blowing the position out at market, or whatever else I deem the best action to take.

    One other point, do a complete post mortem analysis after the trade and reconstruct what happened and create a plan for avoiding this in the future. Pay particular attention to the events leading up to the loss as these will be your "leading" indicator for recognizing that you are getting in trouble and need to take action.

    Good trading to you!

  7. Maybe a better explanation would help.

    I had $250 in my account. Which wasn't enough margin to trade even one contract. Then I took out $900 in Cash Advance from my Credit Card. Which I could use for one month where in which I could pay that back with a $30 fee and a payment of $930.

    So, I had $1,150 to start out with. Couple of days of trading that last week, I ended up with $1,400.

    This week's starting Account Value: $1,400
    M: +$ 400, Account Value: $1,800
    T: +$ 500, Account Value: $2,300
    W: -$980, Account Value: $1,320

    I am just afraid to take losses. $50 is a lot of moneys.
    I will try to graphically describe what happened. I cannot believe I lost this much on one trade.
  8. STOP TRADING RIGHT NOW! You had some beginners luck, pull out your cash and pay off your debt. NEVER trade with borrowed funds or money that you need. Scared money can't trade. If you are too attached to the money you will inevitably get whiped out.

    Practice more on a simulator, build up a starting stake, and then come back into the game.

    Just my opinion, but I think it is good advice.

  9. M Vega

    M Vega

    When you're affraid of taking losses you should not trade! I lost a lot of money because I did not go out at my stop-loss last week!
    When you get to emotional with your trades, it simply won't work!

    M Vega

  10. Hmm.. I smell an undercaptilized trader... lol
    #10     May 11, 2005