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Coming Back after BlowUp


Discussion in Psychology and Money Management

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  #1 (permalink)
 
KahunaDog's Avatar
 KahunaDog 
Hawaii at the beach
 
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Lamely, I blew up an account.

ALL SUGGESTIONS welcome? Which sticky do my fellow trader suggest first?

I fell down the Rabbit hole. Blew up an account. (Honesty and Acceptance. sigh.)

I account this to mental aspect, not method.

Did some of the classic mistakes.
1. Overleveraged caused me to take a bigger than normal loss.
2. Chased my loss(see #3)
3. Moved targets(let decent and good profits turn to losses... wtf???) I could've made up my big loss if I didn't mix systems.

Going to reWrite my rules. Rules of engagement. Exits. Etc. This is to Visually clarify and reconnect with my system.
Need to REwrite ALL STOP trading parameters. Realignment method and process. (Daily, Weekly Process and Outcome Goals.)

Going back-test minimum my primary method 100x with notes to see if any nuances I need to tweak. Again to reconnect and prove to myself that if I just stick with it, it works and as a punishment/cost to rebuild good habits.(This is Method, mind connection.)



I "Chased" a big loss that I incurred from being overleveraged, as most of my trades were actually profitable, but I failed to EXIT according to my backtested and proven target levels.
Part of problem when chasing was conflicting trading styles on same account. As in using momentum(breakout) and value(pullbacks) trades at the same time. Instead of taking and pocketing my ticks, trying to hit homeruns using pullback targets on breakout trades.

Ultimately, I think what did me in was I chased my losses(using pullback targets on breakout trades), wanting to make loss back in one trade, which is not how my systems were designed and proven. After a big 'mistake' like being overleveraged I plan to realign myself. Determine what occurred, differentiate if it was a "mistake" or "market occurance". Will regularly withdraw and if needed refund account to keep at same monetary level, which helps regulate risk, chasing and other variables I feel were a detriment.

I'm going to go back through VanTharps and Steenbargers works, redocument my parameters and any other related exercises. Also going do some regular mental performance work with a psychologist starting with some biofeedback.
As well as go through and process the stickies in this forum section.

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  #3 (permalink)
 
teamtc247's Avatar
 teamtc247 
Fairburn, Georgia
 
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Eh Kahuna,

Howzit! Welcome back. I'm not one to give advice but do you keep a trading journal?

Shootz!

Process oriented goals #1.
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  #4 (permalink)
 
cory's Avatar
 cory 
virginia
 
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rewrite rules will not stop you from blow up the second, third, fourth time etc...instead rewire your brain, reinvent yourself, and reinforce desirable traits to repeal bad outcomes.

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  #5 (permalink)
 jimjones26 
Tulsa OK
 
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cory View Post
rewrite rules will not stop you from blow up the second, third, fourth time etc...instead rewire your brain, reinvent yourself, and reinforce desirable traits to repeal bad outcomes.

Well said.

20,000,000
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  #6 (permalink)
 
GaryD's Avatar
 GaryD 
Orlando, Florida
 
Experience: None
Platform: shoes
Trading: happy
Posts: 6,462 since May 2011


KahunaDog View Post

I fell down the Rabbit hole. Blew up an account. (Honesty and Acceptance. sigh.)

I account this to mental aspect, not method.

Did some of the classic mistakes.
1. Overleveraged caused me to take a bigger than normal loss.
2. Chased my loss(see #3)
3. Moved targets(let decent and good profits turn to losses... wtf???) I could've made up my big loss if I didn't mix systems.

.



The reality of the power given to you in that seemingly simple trading platform should be allowed to sink in.


Relax, that experience is now over.


Overleverage is enemy #1. For what? To be "rich". If that is the reason you are still trading, be prepared for blow up #2...

Or, take that hit as a permanent scar, a reminder that this is not a game, and money does not come quite that easy. Trade because you enjoy the concept, you like the idea of survival and managing risk, and unknown possibilities.

Reduce size, find your inner thoughts and weaknesses. Learn for yourself why trading is so hard to align to our natural instincts. Discover things about yourself that you never knew were related to trading.

Wonderful that you started this thread as you did.

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  #7 (permalink)
 
mfbreakout's Avatar
 mfbreakout 
BOSTON, MA
Legendary Market Wizard
 
Experience: Advanced
Platform: Tradestation, TOS
Trading: ES, CL, GC
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KahunaDog View Post
Lamely, I blew up an account.

ALL SUGGESTIONS welcome? Which sticky do my fellow trader suggest first?

I fell down the Rabbit hole. Blew up an account. (Honesty and Acceptance. sigh.)

I account this to mental aspect, not method.

Did some of the classic mistakes.
1. Overleveraged caused me to take a bigger than normal loss.
2. Chased my loss(see #3)
3. Moved targets(let decent and good profits turn to losses... wtf???) I could've made up my big loss if I didn't mix systems.

Going to reWrite my rules. Rules of engagement. Exits. Etc. This is to Visually clarify and reconnect with my system.
Need to REwrite ALL STOP trading parameters. Realignment method and process. (Daily, Weekly Process and Outcome Goals.)

Going back-test minimum my primary method 100x with notes to see if any nuances I need to tweak. Again to reconnect and prove to myself that if I just stick with it, it works and as a punishment/cost to rebuild good habits.(This is Method, mind connection.)



I "Chased" a big loss that I incurred from being overleveraged, as most of my trades were actually profitable, but I failed to EXIT according to my backtested and proven target levels.
Part of problem when chasing was conflicting trading styles on same account. As in using momentum(breakout) and value(pullbacks) trades at the same time. Instead of taking and pocketing my ticks, trying to hit homeruns using pullback targets on breakout trades.

Ultimately, I think what did me in was I chased my losses(using pullback targets on breakout trades), wanting to make loss back in one trade, which is not how my systems were designed and proven. After a big 'mistake' like being overleveraged I plan to realign myself. Determine what occurred, differentiate if it was a "mistake" or "market occurance". Will regularly withdraw and if needed refund account to keep at same monetary level, which helps regulate risk, chasing and other variables I feel were a detriment.

I'm going to go back through VanTharps and Steenbargers works, redocument my parameters and any other related exercises. Also going do some regular mental performance work with a psychologist starting with some biofeedback.
As well as go through and process the stickies in this forum section.

My recommendation will be to have 3-60 days of successful trading per your plan/method in SIM account with consistent position size and then go LIVE.

Use of leverage is one of those habits which i find toughest to overcome. I have been successfully trading for 2 years and couple of times a month, i get bored with consistent returns with consistent position size and get SMACKED when i use leverage. I have tried everything to CONTROL this and no success. Finally, I just gave up and accepted it as a part of my trading. Only thing i seem to CONTROL is not to over leverage.

Bottom line, if you have leverage problem, i hope it's not as addictive as I have. Good luck.

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  #8 (permalink)
 Cloudy 
desert CA
 
Experience: Intermediate
Platform: NT7, various
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Did you "average down" which has many synonyms i.e. "doubling down", "averaging a loss", "adding to a loser" etc. which is the biggest way to incur losses. It can be a nasty habit. Unfortunately the point of "ruin" is hit eventually and suffered. Maybe learn to reverse instead if there is a reversal entry.

As mentioned maybe start with smaller account, forex sized or micro contract. Accept all losers for the goal
of keeping a tally. maybe use replay at 6x or 10x to gather data. the first month or two doing this is to help gather
stats (or spreadsheet tables) on the method and your performance of the system. if 40% loss of account, then no live trading for three months. Research and regroup. Then rinse and repeat.

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  #9 (permalink)
 
bobwest's Avatar
 bobwest 
Western Florida
Site Moderator
 
Experience: Advanced
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Welcome back. And congratulations for being willing to be honest.

Blowing up account(s) is really very common, it's kind of a rite of passage. (Done it a couple of times.) Once you've done it, you may actually be better for it. (Or maybe not....) But there's a chance to learn.

The thing is, trading with real money makes people crazy. We do things that don't make sense in retrospect. We wonder why we ever thought X or Y or Z. Yes, following rules is one of the things to do, and maybe rewriting them too (if your rules are well-tested), but it's not about rules or following them.

To emphasize some very good advice, here's what it is about:


cory View Post
rewrite rules will not stop you from blow up the second, third, fourth time etc...instead rewire your brain, reinvent yourself, and reinforce desirable traits to repeal bad outcomes.

The best advice I can think of is, don't let the fact that you are using real money make you nuts. Going from sim or backtesting, where it's all theoretical (and where everything usually works), to putting money down is where a major line is crossed. You have got to make that transition, knowing that you will look at everything differently once real money is at stake.

The simple awareness that every one of us thinks differently (and much, much more poorly) when we are trading for real bucks is a very important step. Then, you might stop yourself from doing things like "chasing losses" and "letting good and decent profits turn to losses...."

Being aware that you do that is how you stop that stuff. Then, just take that good profit, and, for that matter, just take that loss. No trade is connected to any other, and no outcome needs to be resisted -- just take your losses or gains cheerfully and look for the next one. No big deal. If your method is decent, and you are not undercapitalized, you will do OK. Unless you are letting the fact that you could lose make you forget your perspective.

Unfortunately, losing money is part of learning how to make it. So, you've got one part down -- the other part is attitude and persistence.

I hope this helps a little.

Bob.

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  #10 (permalink)
 
KahunaDog's Avatar
 KahunaDog 
Hawaii at the beach
 
Experience: Beginner
Platform: Nt8, MotiveWave, TOS
Broker: S5
Trading: ES, ZB fine alcohol and muscle cars
Posts: 549 since Apr 2013
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Thanks for all the wonderful support people.
With respect, I've had some decently profitable runs and consecutive months. Not great, but some good regular profitable trading.

Not sure if it's just like a crack addict jonesing for crack. Always the urge to make money.
I need to remember the patient cheetah waiting analogy. As well as money in the corner, walk over to pick it up.


cory View Post
rewrite rules will not stop you from blow up the second, third, fourth time etc...instead rewire your brain, reinvent yourself, and reinforce desirable traits to repeal bad outcomes.

Bro I'd love to hear more specifics.
So far ^ I wrote my plan was/is to do 100x replays with notes, to rebuild positive reinforcement of following my structure. As well as to do work with a psychologist, specifically biofeedback to start. I think those will be a good start for 'rewire(ing) the brain'. Any further specific input appreciated.
Cheers bro.


Cloudy View Post
Did you "average down" which has many synonyms i.e. "doubling down", "averaging a loss", "adding to a loser" etc. which is the biggest way to incur losses. It can be a nasty habit. Unfortunately the point of "ruin" is hit eventually and suffered. Maybe learn to reverse instead if there is a reversal entry.

As mentioned maybe start with smaller account, forex sized or micro contract. Accept all losers for the goal
of keeping a tally. maybe use replay at 6x or 10x to gather data. the first month or two doing this is to help gather
stats (or spreadsheet tables) on the method and your performance of the system. if 40% loss of account, then no live trading for three months. Research and regroup. Then rinse and repeat.

I didn't average down or in. Basically chased my losses and over traded without exiting when market and system told me to. Specifically, was in CL trend as breakouts, though failed to take profits due to strength of trend. occurred repeatedly.
I am going to take your advice and use 6x or so on replay. Sometimes I do it "too fast" and loose some of the replay effect and experience.

I am installing new rule, changing the ninja box on chart trader to ticks only. Chasing the top tick to squeeze one more tick in cost me due to moving my targets(chasing) but failing to move SL first. Blinded by dollar signs and chasing. As an example was up 26 ticks in one trade, should have scaled aor exitted according to my system. I do note one of my losses the battery died in the mouse(wtf. that's not even the first time I had mouse issues). lol. So that's another rule to change. Diligently replace battery in mouse every 2weeks or less no matter the usage. Batteries are cheap.
That part wasn't to displace blame, just a reality, my technology failed there.

Lots of work this weekend on replay and spreadsheet.

At this point as for time on demo, I'm looking at a week, maybe more to realign completely before going back live.

Some added things for me to do in my daily journal will be market conditions, observations, and forecasts.

New rules so far:
*use 6x replay or less
*change the battery on mouse every 2weeks
*use ticks in profit vs dollars +-(this will help with taking profits)
*move up SL before moving up targets reversed order and lost some break even ticks there(keep winners from turning to loosers)

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Last Updated on July 16, 2013


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