You guys blowing out your accounts left and right

Discussion in 'Trading' started by Saltynuts, Mar 20, 2018.

  1. wrbtrader

    wrbtrader

    I think a "rite of passage" would be big losing trading day or a drawdown but not a blowup trading account (trader can no longer trade until account is refunded).

    Regardless, I've seen more traders here at ET talk about their accounts blowup or calling it quits in the past 12 months than any other year I've been here at ET. Yet, are you suggesting that blowups are more common than not ???

    If that's what you're saying...I can't disagree with you. :(

    Anyways, I can relate to what the OP of this thread is talking about. Many traders here at ET had talked about such as if its something they needed to go through although those words were not used but they seemed to react to their blowup as if it was just fender bender. The one thread that sticks out for me was the one where the guy maxed out his credit cards along with taking out personal loans to only start bleeding the trading account with consistent losses until the infamous blowup day.

    wrbtrader
     
    Last edited: Mar 20, 2018
    #31     Mar 20, 2018
  2. comagnum

    comagnum

    Those that interview the big time traders have commented on how blowing up a time or two is something that they all seem to have in common. ;)

    The average retail account cant possibly be as small as some here claim. A study back in 2000 showed the average full time retail trader account was $114k, are retail traders accounts getting smaller? :banghead:

    Average account sizes of what I could find:

    TradeStation (10-Q, 2010 Q4)
    Equities $70,700
    Futures $21,800

    Interactive Brokers (10-Q, 2010 Q4)
    Universal Account $125,000

    Fidelity (10Q, 2017 Q4)
    401(k) $99,900
    IRA $103,500
     
    Last edited: Mar 20, 2018
    #32     Mar 20, 2018
  3. jinxu

    jinxu

    Yes, it would have been best if he had learned his lessons with a smaller account. It really doesn't matter if you blow a 100k account or a 1k account. It's the same lesson learned. Life is about making small mistakes so you don't make the bigger mistakes later on. Now he has a much bigger hole to dig out of on his path to profitability.
     
    #33     Mar 20, 2018
    soulfire likes this.
  4. I actually made money on a trade once. Admittedly, I hit the sell button in instead of the buy button and then accidently added to my short while attempting to reverse my position. By the time I tried to get out, the market closed. The next day the stock gapped down and I sucessfully closed the position at a profit.

    Been trying to repeat that performance ever since!
     
    #34     Mar 20, 2018
    bpr, _eug_ and Saltynuts like this.
  5. jinxu

    jinxu

    Nope.

    https://www.elitetrader.com/et/thre...ills-to-crush-the-market.313333/#post-4518412

    Note. I've even had a $1000 profit day already.
     
    #35     Mar 20, 2018
  6. wrbtrader

    wrbtrader

    I believe it is because I do know TradeStation, IB are notably larger although I'm not aware of any survey involving Fidelity.

    Yet, what I was commenting about involved +20 brokers including forex brokers back in 2008.

    As for full-time retail or part-time retail...can't remember if that survey was categorized as such. Regardless, there was an article on Bloomberg last year that the account size of the average trader were getting smaller.

    wrbtrader
     
    Last edited: Mar 20, 2018
    #36     Mar 20, 2018
  7. comagnum

    comagnum

    Many traders have blown up, even after having years of success & large accounts , nobody is immune from blowing up. In fact most will blow up a time or 2 before they have a decent risk mgmt strategy, even than you need a fierce resolve to always follow it. Making a lot of $ is the easier part, keeping it is the hard part. The old saying "our worst draw-down is the one that we haven't had yet"

    Jack Schwagger has interviewed many of the top traders. This is an excerpt of an interview someone did on JS, the excerpt on blowing up:

    It's almost folklore in some circles that becoming a great trader involves getting wiped out or suffering some huge set back at some point – was that generally the case with the great traders you interviewed?
    JS: Some did go through that, but others didn't. Some were successful from the beginning and others blew up multiple times on their way to mastering trading.

    Do you think those who had a smoother time becoming top traders, i.e. avoiding blowing themselves up, did more preparation and studying before becoming traders?
    JS: I think it's just a difference of approach. Some people have an innate need to apply risk controls and that stops them from blowing themselves up. Whereas other people start out not understanding the risks and have to learn about them on the way.

    Reading some of your books such as Market Wizards many of the traders you profiled come over as very conservative in their approach to trading. So for instance they'll typically risk less than 5% of their capital on a trade.
    JS: Actually most will risk far less than 5% on one trade. Many risk less than 1% on any single trade. That's true because risk management is such an essential part of trading. You'll find that the vast majority of top traders have a robust adherence to their risk management strategies.
     
    Last edited: Mar 20, 2018
    #37     Mar 20, 2018
  8. sss12

    sss12

    I guess I would ask
    Of these accounts how many clients and with what amounts are actually trading vs what they consider investing ? Ie: sitting in an under performing MF that they think is great since it is "no load", etc.
    Especially the Fido's ?
     
    #38     Mar 20, 2018
  9. jinxu

    jinxu

    Yeah, about this...Not my definition of risk control. This is more like a crutch for Trading 101.
     
    #39     Mar 20, 2018
  10. I love that story !!!
     
    #40     Mar 20, 2018