How much did you lose in your first year?

[Jesse Livermore]

Hi People,

I have been reading through Dr. Alexander Elder's "Come into my Trading Room", which he states the first year trader should expect to lose at least 10% of their capital. The purpose of this thread is to ask members how much they lost (or made (which would destroy Elder's theory)) in their first year trading?

Jesse Livermore

[canny]

I think the first 3 to 4 months was the worst for me.
Found a big difference between paper trading and real trading. You realise that you're being dishonest with yourself on paper!!!
Need to establish patterns and discipline.
I probably lost a bit more than 10% in that time - but slowly brought it back round.

[bvbfan]

I was down 40% at one stage after about 4 months but ended up 35% after 12months

[It's Snake Pliskin]

I lost about 6% in the first financial year. Learned a lot form it. I have never paper traded and don't believe in it. It's like fighting a punching bag. Mentally it is different. Works for some though, can't discount it for others.

[tech/a]

First year $20k.
Investments in books,software and Securities Institute courses,seminars etc another $10K or so.

But with any business even if its part time you'll need to make an initial investment.

[Knobby22]

Good to see such honesty from everyone.
I traded through a stockbroker and didn't lose at all for the first five years however when I went online I found I was too confident, too active and acted too quickly. I went backward $20,000.

[mit]

10k on warrants going long the index prior to March 2003 and going short the index after March 2003. Duh!

MIT

[Battman64]

Spent very little in my first year.
Made money buying Public floats and Stagging them.
Spent thousands studying Futures in my first year.
First short trade made $1000 overnight...was hooked.
Lost $5000 after that.
Spent thousands more on education.

[Fleeta]

Started in June 99 buying tech stocks.....you know how this one ends!!

I lost over 50% before I pulled out!!! Lucky I didn't have as much money then as I do now!!

[Battman64]

"First short trade made $1000 overnight...was hooked."

Monday 4th March 1996
First trading day after the election.

We were expecting a High on a "Gann Time Frame"
SPI High was 2374 and we closed lower 2355
(I knew about the Double Top 2368 3rd Feb '94)
Sold the confirmation of this High & held overnight.

[Battman64]

I had caught the Gann bug and thought I knew what I was doing.
Went on to lose my first account and then spent thousands on study.
The journey has been fantastic, though often painful.

[TjamesX]

Wouldn't class myself as a trader.....

Am currently almost at the end of my first 12 months in the stockmarket, and am happy to report around 18 - 19% return on capital. I think the last 12 months has been a good time to be a beginner (kinda like those entering real estate around 2000-02), we'll see what the future holds. Definitly learnt a lot in that time.

[VTyro]

100%

And it took me another 4 years to get it back!

Tyro

[skin]

first buy was Roma Petroleum (RPM), in mid 1990's. I even encouraged my 3 sons to particpate - floated at 20cents went down to 1 cents and broker said to sell them off for a loss. I haven't heard the last of this one - 3 sons - have paid them back their $100 each. Broker has lost tens of thousands - AMN, Gympie Gold - so am having a go myself. My trading account is nearly always at 20% loss - and I sell off my gains. Am waiting for one of my current ones to "gallop away" to get rid of my loss forever. Patience is a virtue.

[Mofra]

I did everything backwards - started with covered calls (Feb01 CWO, the Mar01 MIM - I'm a stock jinx!). So made profits for a while, got cocky and pushed margins with written puts before one disasterous trade took most of my profits from over a year. THEN spend many hours studying, went back to equities only before returning to options last year.

[JetDollars]

01/11/04 - 30/06/05 - Lose 25% ($20k) of total capital $$80K.

Stop trading for 13 days now.

Now rewrite new trading plan and system and try to work out why I lose.

[RodC]

I don't think I've had a year where I've lost overall. But I've certainly had some periods within some of those years where I've lost.

This has has usually happened wnen my ego has got ahead of my abilities (eg: trading warrants with no idea of volatility or time decay and thinking I knew better than the market).

Hopefully I've put most of that behind me, I now have no hesitation in setting a stop (and acting on it) and I no longer have favourites.

Rod.

[enigmatic]

Thread been quiet for some time but what the hell

25k arround 65% been another year and a bit more of that financial crisis and back to 43% loss on my intial outlay.

must admit mid Nov was down more then 65% HAHA.. was a tough leason but I hope I learnt it.. Trailing and stop losses Must have Current Open trades.. not including long and Oh you definitely stuffed that investment not included...

capital risked was 2475.40 current unrealised profit 879.275 Currently up 1049.25

So my new Plan seems to be paying off.. So far..

[metric]

doubled my money, lost the profits and came out even......cheap education.

i wont get back into the market for a few months yet....

[enigmatic]

Perfect time to be getting in and out of the market. aslong as you have a good strat which keeps your losses to a min and lets you ride the ups you should do good.. IMO

[sammy84]

Made 35k in a BNB trade. Thought I was the master and this all was to easy. Lost the 35k and more in the next 3 months :sly:

[matty2.0]

During the mad month of October (or was it November?) of 08 during this credit crisis, at one stage my portfolio was down -40% to -50%!!

[ojm]

I've been trading about 2 months now. I've deposit $2200 into my share trading account, and I'm $107 up so far after fees (got a stock that is down $100 which has stuffed my profit level :banghead:). Keep adding more capital to the account every now and then.

I feel I'm being quite careful and hopefully won't lose too much in my first year (hoping to continue to be profitable!). I think I'm being too careful as I chickened out of buying some stocks and they have grown substantially (a one bagger for one of the stocks I think the term is :)).

[johnnyg]

Id say Ive had an active interest in trading for the last 18 months. In that time id say I'm pretty close to break even. In paper profit I think that I might of been somewhere between 20-30K + and then lost it all again threw basic beginner mistakes.:banghead:

That said I know that being a trader is what I want to do and I'm now taking the steps that should provide me with the best chance to be successful.

[tech/a]

20k in the first 6 mths.
14 yrs ago---

Time heals all pain,but
Profit does a better job of it!

[MACCA350]

After 6 months I'm sitting at 10% ahead(would've been more if not for a $16k loss on BNB:banghead:)...........have to wait and see how the rest of the year pans out.

cheers

[Jack Payback]

I am in first 6 weeks of active trading and am down 10%.

I would probably be even except for 1 HUGE mistake. Let's say I suffered from a bout of "irrational exuberance"!!

[canaussieuck]

In 2006 i made a 54% return in 3 months of trading stocks with Etrade. I switched to CFD's and lost all the profit in just 30 days. I knew nothing about Fixed Fractional Positioning and at the time IG Markets would only let me use GSLs. The stops therefore were not calculated by me, but by them. I left myself exposed more than 2%, much more. After a string of losses, like 23 or something i pulled the pin.

After that i recapitalized, wrote my trading plan down, opened a margin account with IB and traded using 1% risk of MY capital. The margin loan instead of increasing the risk, allowed me to trade many more positions. This increased my chances of hitting a big winner. I traded Nick Radge's US Power setups both long and short, becoming more and more comfortable, then started picking my own trades as well.

I have made all that i lost back now, and more. But the scars from that experience still haunt me a bit.

The best thing that i have learned from Nick is Risk and Trade Management, and Jason Leavitt has taught me that "if you get good at hitting singles and doubles, every once in a while you will hit a home run".

I've spent allot of money on hardware, software and books. More than needed really. Its been a great journey so far, and i look forward to my future experiences, every moment in the market is unique, so too are the learning outcomes.

Cheers,


CanOz

[IFocus]

Actually made a couple of $K then decided I was a genius and proceeded to blow 3 $10K accounts

Some where during the 3rd account I went back to basics and found the holy grail.....testing, money management and more testing etc.

[marcadrian]

I'm similar to a few here - started 3 months ago and am down about 7% currently. Long system has had some good wins but my short system caught me out. Learnt a good lesson - check whether the stock you are going to short is going ex-div in the next 2 weeks. If it is, avoid it.

[johenmo]

first year - dabbled a bit, made a couple of grand on a small dabble. Easy stuff, I thought.

Came back a few years later - lost 6K. Still have a couple of them.
Have changed tack considerably & now know about/understand stop losses.

[Trembling Hand]

About 80 grand but to be honest the biggest cost was the 4 years it took to understand what moves markets and how to make money from it.

Money you can earn back. Time once lost is gone forever, probably why most look for a short cut and probably why most fail.

[Grinder]

About 80 grand but to be honest the biggest cost was the 4 years it took to understand what moves markets and how to make money from it.

Money you can earn back. Time once lost is gone forever, probably why most look for a short cut and probably why most fail.

TH, can you tell me about your thinking during that time. Not trying to be facetious, just have an interest in pyschology & would like to know the mental strength required to get back from that.

[Trembling Hand]

TH, can you tell me about your thinking during that time. Not trying to be facetious, just have an interest in pyschology & would like to know the mental strength required to get back from that.

Well to tell you the truth it was frustrating but that was the attraction. I could see the massive potential. Far greater than anything I had seen in any business I had been involved in beforehand and the fact that it was so bloody hard made me even more determined to crack it.

And really I was use to failure :o. I had tried to make it in cycling then left that to start a couple of businesses that went broke so setbacks were not that uncommon :(. In fact from my sport & biz back ground I knew they were inevitable and part of the learning process. ie practise , review .................

[AlterEgo]

Well to tell you the truth it was frustrating but that was the attraction. I could see the massive potential. Far greater than anything I had seen in any business I had been involved in beforehand and the fact that it was so bloody hard made me even more determined to crack it.

And really I was use to failure :o. I had tried to make it in cycling then left that to start a couple of businesses that went broke so setbacks were not that uncommon :(. In fact from my sport & biz back ground I knew they were inevitable and part of the learning process. ie practise , review .................

TH, so what was the ‘light bulb’ moment that first put you on the right track? And were you scalping back then, or has your trade timeframe reduced over time?

thanks

[Trembling Hand]

Lots of little progressive steps. not one "secret"

[Rastan]

My first year was last year and I lost the lot at about $60K. I wanted to do a finance course at uni fulltime - well essentially i wanted to learn to trade fulltime and the degree was a) a good thing to tell others what I was doing and b) something to put me in the finance industry to learn more if I cant day trade by then. Anyways I took 80K out of the home loan in readyness to take a year off, and in my first year (part time) I made friends with a broker who encouraged me to open a margin account. New eager (wannabe) trader + margin account + lots of capital to lose + major market burst = me has no more money. So there goes the year off work, but I am still doing the course. I am licking my wounds and learning whats is a very valuable lesson (in lots of ways)... It's hard now that the market is rebounding not to have capital to use to get it back, but there's a lesson in that for me too...

[Grinder]

thanks for sharing TH. It's always refreshing when one speaks candily about their experiences. I can relate on the buisness side of things, been there also.

[Nero64]

Lost 100% of trading captial - 2 years of savings (50k). Wiped out 4 CFD trading accounts.

Thought my Bank Balance could beat any down turn, but no it couldn't.

Never been hurt badly doing shares, just indicies. Made the same mistake 4-5 times. No stop losses and large positions = disaster. The final blow came when I owed money to 3 brokers and they chase and harass you with no respite.

Don't pity me, pity the person that gives up.

[canaussieuck]

Lost 100% of trading captial - 2 years of savings (50k). Wiped out 4 CFD trading accounts.

Thought my Bank Balance could beat any down turn, but no it couldn't.

Never been hurt badly doing shares, just indicies. Made the same mistake 4-5 times. No stop losses and large positions = disaster. The final blow came when I owed money to 3 brokers and they chase and harass you with no respite.

Don't pity me, pity the person that gives up.

Wow, appreciate your candor, well done for persevering.

CanOz

[korrupt_1]

first year:

made $350K'ish
lost $400K'ish
---------
nett -$50k'ish

[So_Cynical]

First year 04...bought 10k worth of Santos at about 5.80 after some plant of
there's blew up, sold about 4 or 5 months later for 13 and a half grand, thought
i was a genius :) i reckon alot of people buying in 04 though they where pretty
smart too...also made a quick 1200 with Telstra.

So my first year was ok...more dumb luck and good timing than anything else, 08
taught me i wasn't very smart at all...09's been half decent so far..only cos i
Haven't realized any losses from 08....Buying/selling with a plan now...also averaging
down in Nov saved 1 big position and 1 smallish position...turned em into small profits.

[Wysiwyg]

first year:

made $350K'ish
lost $400K'ish
---------
nett -$50k'ish

From your posts I can understand how inexperience and money are soon parted. Too stupid to be true.

[korrupt_1]

From your posts I can understand how inexperience and money are soon parted. Too stupid to be true.

yeh... it was too stupid... but really... most of the gains and loss was due to hedging... and when the it got too hot... i closed it all...

approximately 250K of hedge was made/loss...

i'm much wiser now... but still a dumb ass in some sense...

[nomore4s]

I made about $10,000 in my first 6 or so months then when I thought i knew everything I lost about $30,000 in the next 6 or so months.

There was some very hard lessons to be learnt in that time and there has been alot of hard work and research done. And I'm still learning. Very easy to see why so few people become successful traders, as most people cannot handle failure and give up.

Like TH the challenge of the market is what spurs me on and it certainly has opened up a whole new world of opportunities for me.

[lionfish]

Confession time.

Turned 20k into 110k during 1998/1999.

Thought I was the smartest bloke on the the street. Then went on to lose the ENTIRE amount in 1999/2000.

Spent the next four years learning, thinking, worrying. In hindsight, the best thing to happen...I got to see the other side of this game...

[wicked]

I am a newbie trader only started in Nov 08. Interesting to read everyone's stories. My mistake is to get really worried that the market will go down and sell just as it's going up. Last week I made about 1K on 3 stocks, sold and then re-bought as it dropped again. Then regretting not selling when I could have made another 1K, thinking it will pick up again on Monday. It dropped in just a few hours! Time will tell!

It all seems to be really hit and miss to me. Some of the companies I have bought look like they are doing well financially. Ansell and Wooloworths just to name 2! Yet their stock price keeps dropping! I just can't work that out. I have seen Rio Tinto drop from $64 to $28 then back to $58, in just a few short months.

I hear some saying it's best to hold onto your stock. But my new strategy is if you have made 10-30% gain on the stock sell and buy low! All easy except when there is no new low...

In answer to the topic, my current holding stocks are down 2-3%. But saying that I have sold a few and to realise about 2.5K. I'm only happy when I see my stocks in the green! I can see how it would have been very easy to loose thousands of dollars in the last 2 years as the stock market collapsed.

Now is probably a good time to watch it grow again!

[CapnBirdseye]

Enough to make me numb to losing. Now its just numbers and I have learned money management and how to be profitable, rather than how to make a profit.

Hunger sharpens the mind they say, and I've learned a lot over the last year or so. I'm sure I have a long way to go though..

[Julia]

I am a newbie trader only started in Nov 08. Interesting to read everyone's stories. My mistake is to get really worried that the market will go down and sell just as it's going up. Last week I made about 1K on 3 stocks, sold and then re-bought as it dropped again. Then regretting not selling when I could have made another 1K, thinking it will pick up again on Monday. It dropped in just a few hours! Time will tell!
Wicked, it sounds as though you don't have a plan? Why do you buy a stock? What is your investment time? What is your exit strategy (if any)?



It all seems to be really hit and miss to me. Some of the companies I have bought look like they are doing well financially. Ansell and Wooloworths just to name 2! Yet their stock price keeps dropping!
These are two basic defensive stocks. Mostly they will do better when general market appetite for risk is low. WOW held up well while most industrials were falling through the floor. However, now that some people seem to think the worst might be over, some of the investment dollars will swing to the stocks that were previously perceived to be too risky, e.g. the banks. Compare the charts of WOW and the big banks over the last couple of months.



I just can't work that out. I have seen Rio Tinto drop from $64 to $28 then back to $58, in just a few short months.
Lots of factors at play here. Proposed takeover by BHP, ditto the Chinalco situation. If you read the basic financial news you will see plenty of reasons for the volatility. Again, maybe you need to consider your time frame.
If you were to be a long term holder, then the short term swings won't bother you.

(That is not a recommendation for any long term holds, nor is it advice.)




I hear some saying it's best to hold onto your stock. But my new strategy is if you have made 10-30% gain on the stock sell and buy low! All easy except when there is no new low...
Answering your own question here. Try "let your profits run".

[wicked]

Wicked, it sounds as though you don't have a plan? Why do you buy a stock? What is your investment time? What is your exit strategy (if any)?

My original plan was to buy and hold onto them for say 5 years! Then I watched my profits drop, by as much as 30%.

Then I panicked and started to sell any that were making a profit, which wasn't a good idea. Most of those continued to rise another 10%!

My plan at the moment is to sell anything that makes 10-30% gain and try to re-buy in the dips.

I don't have an exit strategy. I'm only using spare cash. I can hold out for the market to improve, which it will.

Like I said I'm new to trading...