I went totally broke because...

Discussion in 'Professional Trading' started by Sanaz3, Feb 16, 2010.

  1. Sanaz3



    I started day-trading stocks 8 months ago with $7,000 and absolutely zero experience. I made some money by chance I call it and lost them a few days later..made, lost, made, lost...you know the end. I went down to $500 recently and eventually declared myself totally "bankrupt", suspended my trading platform, and I am currently taking some time off. Meanwhile, I have no other source of income and was forced to ask my father to bail me out.

    Long story short, I learned alot from my mistakes and the most valuable lesson I learned the hard way of course was: Get out of a losing trade before it's too late.

    I have come up with a set of trading rules for myself, which I didn't have before and am trying to apply them when I get back to trading again in the near future. Here are my "5 simple rules":

    1- Do NOT rush, wait for a 100% certain opportunity to get in!

    2- Do get out of a losing trade before it’s too late (max 2% loss)!

    3- Do not switch between going short ↓↑ long frequently and confusedly!

    4- Do not hold positions overnight in the hope of tomorrow!

    5- Do not trade during pre-market & after hours!

    From your personal experience, tell me please what you think of these and what I am missing or need to add as far as the rules are concerned. Thanks.
  2. dont trade with more than 10% of your liquid net worth
  3. 1 --> Certain opportunity is defined by a tried and tested tradeplan. When you get a plan you can religiously follow theres no such thing as entering too late or too early.

    2--> good rule.. maybe 1% even to start out

    3--> this should be rectified through additional study of TA and a tradeplan

    4--> depends on the market (if AH trading), timeframe, leverage, etc.

    5--> good idea.. different PA, harder to understand at first...

  4. There is no 100% certainty in trading. Nor in life. If you wait for a "100% certainty", (and it wll only reveal itself after it has already happened) you will miss the trade.

    Sometimes, a 70%+ certain is a good enough bet. Something that happens 7 to 8 times out of 10 is good enough. Manage your risks, keep your losses small, let the wins pay off for all your losses.
  5. Soweeak


    I think writing a set of rules is quite easy, but the point is : will you apply them consistently ?

    I am currently working on that, I can tell that I need a lot of time before I go back (for big money) to the market.

    Have fun
  6. joe4422


    Honestly, you should find another source of income. If you're a newbie, and you want to make a living trading, you honestly have almost no chance.
  7. you were already bankrupt to begin with
  8. You're undercapitalized. What percentage of your net worth is the 7k?
  9. Quite frankly , you need a good kick in the arse by your father..period!!!

    Read what you wrote and you will find the answer 'why'...

    A fool is easily parted from their money...

  10. Sanaz3


    7K was all I had saved up. i.e 7K was my 100% of net worth. In fact I shouldn't have put all that money into day-trading with zero experience. My account was margin and got 3X margin.
    #10     Feb 16, 2010