It's been quite a journey. For over 5 years I have been waking up at 7:30am trading equity, index, and commodity markets. Generated thousands of round trips every month, and wrote myself consistent pay checks month after month. But last week; ending September 11th 2005, I have finally reached the beginning of the end of my trading career. I have told myself that no matter what, once my account reaches to a level breaking under $10000, I would have to step aside and re-evaluate. Unfortunately, it happened a lot faster than I have expected coming from a $300000+ account in July. I lived thru the days of nasdaq lvl2 day trading, the tech boom, the bust, the dull time, and then the war. I took pride of my ability to buy into fear and sell into greed. It has been very rewarding, but all this "knowledge and wisdom" were out the window when I was faced with the ultimate test in trading; Discipline. The hurricane volatility wiped me out within matter of 6 trading days. Dear fellow traders, if you have once experienced the feeling of great lost from bad entries or bad exits, I can guarantee you that the feeling of despair cannot be compare with trading lost due to the lack of discipline. It hurts a little bit to have sold that GOOG a little too early, It hurts a little more to have not held on to that QCOM short back from 2001, and it definitely hurts selling all that 50 QM crude Sep contract below $60 a month too early. Those are small cuts on your skin when you look back. A deep slash is when you churn longs and shorts of the QM crude 30 times around the $70 level. $4500 at a time, your account just evaporates into those wild whips. The next thing you know, you are down over $150000 within a week. The worst is when I was asked how I lost it, where exactly did I get cleaned up. I couldn't find an answer. That's when I realized that I was the sucker between those bids and offers all along. I had no plan, no levels in mind, but only a naive anticipation of a direction. Frankly I don't really know why I am sharing this tragedy with you all. I don't have any complicated trading systems to share, nor do I have wise words to make your trading life easier. But before I take a break from trading, I thought I would maybe share my failure as a way of contributing back to the great ET community. Take care fellas.
This is exactly why I have a strict $150K annual stop loss. Down $100K I stop trading for a month. I hit $150K I stop trading for rest of year. Good luck to you, even thought it hasn't happened for a long time I still remember how devastating it can be. Focus on your health and recovering mentally from the blow and getting back on an even keel before even thinking about trading again (don't even check quotes, just take a complete break from the environment altogether). Above all, accept the loss, put it behind you. Get plenty of sleep too as it will help dealing with the emotional aspect of the loss.
======= Salute, Momento; Thanks for the info. That partial plan was better than my lack of a first plan; at least you hit your ultimate stop ,$10k Also achieved several educational benefits including not being liable for a negative balance.
imagine if you had bought GOOG calls with that same 300,000 back in April? In my view, why trade when investors are making out much better if they bought the market back in April, and also invested back in 2003. Frankly this very short term trading is becoming a joke, and I am not a day scalper but rather a position/swing trader. But frankly I would do better buying options at all index lows of the past two years (and highs), and holding for weeks. And....... don't say buying highs or lows isn't doable; it's the day in and day out b.s. that is the real issue/culprit here for most. Actually I a beginning to think one could do as well or better (with more fun) just playing poker! Ice
down 100K? WOW! Only a month hiatus?!! why throw that much away in these insane hedge fund/program markets. If you got that much to "lose" why are you even bothering trading rather than investing... must be better things to do with capital nowadays than tick f*ck the eminis etc.
hey don't quit... I remember 2-3 years ago when I started. After a couple months I would do great for about 6 months, I couldn't believe how good I was then, I lost 60% of my account in 1 day. I got too confident. it was only about 50k...but it was a lot to me. I took a break from day-trading for almost a year...I watched the market, and slowly got back into it. right now, everytime I make a mistake (missed exit), instead of going out right away, I wait until the next day. I know that some people don't agree with it...but I prefer making "new" decisions once the market is closed, when I'm not under any sort of stress... it pays off, but I also try not to trade any risky setups...
Sorry to hear about your loss Momento. If you care to answer, was your approach in crude oil mechanical or discretionary? Thanks, and good luck to you on you next comeback!
Thats the main reason why I stopped trading futures regularly. You need almost superhuman discipline to avoid the vicisous drawdowns that can happen when you lose control. Whenever I find myself in a major drawdown I always ask myself a question. Whats wrong with my trading? Is it my strategy...or is it me? And every time the answer has always been 90% me, and 10% strategy. So I tighten up my trading, and before you know it, I'm back at an equity peak. I suggest you ask yourself the same question.
Momento, Sincere thanks for sharing this. It's all of our worst nightmares. I hope you get back on your feet and soon! I'm curious though...about you. Have you not been taking your holidays and disconnnecting totally from trading? What else could have caused this apparently sudden loss of perspective/discipline? All the best, Q1