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How many blew up an account before becoming a successful trader?
Zero, not bragging but this poll does intrigue me. Because I seen it mention on this forum "I blew up 2 $100,000 accounts before I became profitable" At what point does someone say hey I need to rethink my strategy or better yet just paper trade
I still consider myself a beginner in regards to day trading futures. Never traded naked options only cash secured, so I'm sure that has saved me so grief. I have had a few stocks that took years to work my way back to cost basis especially after the 2008 financial crisis.
All aspiring traders lose before they win except the ones that get lucky and those lucky ones usually give it all back plus more. However, the real reason for the failure rate eludes most people. It's not because 95% are stupid. Most traders lose because they do not fully comprehend how the game is played. I certainly didn't. Just understanding the impact of large orders on the market might have helped me blow out only three accounts instead of four back in the day. One should certainly not accept blowing out as an inevitable part of the process but neither should a person expect to be profitable before he or she fully comprehends the dynamics of the game itself.
This is a interesting question though I am not seeing a measurement for the OP's original question.
How much did you invest in your first, second or third account? 300 dollars each to gamble forex?
Or 1 million of a client to achieve some high set goal?
Now - if you have lost all 3 small accounts or the one big of the client - what is the deal?
OK - now let's start the thinking process from a different angle.
Trading is a business - to be compared with every other business.
Now if you want to start your own business - how MUCH are you willing to invest first?
Own money or other peoples' money does not really count here.
If you want to be a business owner - you might invest small. If you overcome the first obstacles
and you are still in business then you can change gear and maybe risk more.
Marking to be a multimillion business director means to prepare business plan(s) and collecting
investors to convince them to invest into your business model before any first green light to start.
Preparation means everything!
SO - to be concise:
Do NOT count your many blessings - but count of how much YOU are willing to invest in time, money,
learning curve and experience in this (or every other) adventure.
I once took a 5k account to 100k then blew out the 100k account. That hurt but getting to 100k was not because I was a good trader. I was just in right place at right time. I was then in wrong place at wrong time and got my first lesson in what the market does to a bad trader with no skill and no money management.
"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
I blew up 2 10k accounts trading options when I started trading in 2009. Had a few good sized winning trades that kept me in the game for a while. Took a little time off and studied a lot about what I was doing wrong and what I was doing right. Switched to futures in 1/2013 and realized this is better for me and my style of trading.
I think many do start out with sim or paper and can do well but when you have real money on the line your emotions can really kick in and change how you trade. Trading live with real money tends to give you different results...more so when you are starting out. So my point is real trading will reveal if you are really profitable or not.
I agree. Sim is not live and is a fallacy. You need to go live once you have a system in place. The key is to trade as small as possible to limit loses until you can get consistent. I have been trading profitably for two months in sim now, but I know next week when I go live again it will be different. That is why I am trading the m6e until I get over the live hump and can just execute my plan daily. Then I will just increase position size after I am adjusted.
I didn't blow up the account, but after losing 60%, I stopped trading live for an extended period of time while I went "back to the woodshed".
My problems were many....but the primary culprit was chasing a 'high win percent' expecting that alone to carry me.
Over time I slowly hemorrhaged cash on losing trades that were too often slightly larger than my winners.
Death by paper cut....long and painful.
My other problems were pretty much the same as everyone else....
- over reliance on indicators alone
- not understanding price movement...(or taking the time to really dissect market movement)
- entry points that did not take into account the proper risk
- Jumping into trades because I was afraid of getting left behind
- Stops placed at the wrong spot....
