I'll give an honest perspective of my account(s) as I think there are lots of lurkers who are too proud to admit these things and as far as I'm conerned making mistakes is good for learning properly (in a perverse way)
I have 2 cfd accounts one I trade share CFDs and the other Index.
The share acount has taken a pummeling mainly because I had Rio as a long but I closed almost every other position yesterday but kept Rio open (bit of a mistake again!), this acccount has lost around 20% value but is bordering on margin call territory so unless RIO picks up this afternoon then I'll close that out but still be in the game.
THe other account is where I've made the biggest booboo by letting an spi long trade become an investment from around 10 days ago (which I dont think will see its price near for months now) and the worst one was that I had a long on dax the other day and for some bizzare reason did not put a stop loss even though I had pledged to myself in the last week to only daytrade the markets due to the subprime issues, only to see it suddenly down thousands, I then made the classic mistake of hoping that the good old US would help it back up but of course that didnt happen, now this account is in dire straights and at risk of being kaput, even better as I saw it break down I had enough equity to put a short on the ftse which kept me balanced but because I put a stop loss on that and it was met then that didnt help at all!!
My options on that are a: put more money in and hope the market rallies soon and doesnt turn into the biggest crash since 87.
b: Close out the positions and lose all the equity completely.
As I write this I must point out that I have fully read and studied these situations prior to embarking trading but still managed to make the mistakes on more than one occasion.
Go on, all the experienced traders can now have a good gloat at what I think will be a very common theme, but at least from my point of view I now have some good old fashioned sense smacked into my head.
Hello caleb2003,
No, you will probably not hear gloating from the true professionals. Because anyone who achieves real success in the market usually has probably had their own rite of passage “baptism of fire” of their own. Me, I did some seriously risky things and learned the hard way too – there is nothing like a significant loss as a wake up call. The market is a ruthless teacher.
I salute your honesty and your ability to take responsibility for your actions. These are the hallmarks of a person who is capable of becoming a very effective player in the market. The fact you can be open and relatively objective about this is commendable, and actually a very positive attribute, more than you probably realise right now.
The question is, can you recover, and learn from your mistake, and come back to fight another day? The long term winners are those that can dust themselves off, pick them selves up and get back up again…
What have you learned? Can you objectively assess why this happened? Can you perceive how important risk and reward analysis is? Can you incorporate better methods for the future? Can you find ways to improve your discipline? Are you prepared to really research and learn about derivatives in depth now?
I would suggest picking up Mark Douglas’ “Trading in the Zone” and perhaps “The Disciplined Trader”, because you have probably suffered far worse damage to your trading psychology than to your bank account, than you realise. If this goes “untreated”, you may find that your future performance will suffer unless you confront your psychology and can be sure that you can regain a level of market objectivity.
Read the Douglas book cover to cover, even if it starts to seem repetitive. If this doesn’t help you through this, and it isn’t of benefit, then you will be an exception…
Also, since you were using leveraged instruments please read through the derivative area and consider the range of discussion on this subject – maybe this seems a bit like closing the gate after the horse has bolted, but if you are determined to continue, you really must devote time to improving your understanding of derivatives. To just trade CFDs without having really worked out the mechanics of a range of derivatives is in my view a serious omission, which Is not obvious until the market delivers a “body blow” when events like this unfold.
Believe me, I’ve been where you are, and I can tell you, this is the hardest game in town. It is all roses until a significant adverse event happens that you haven’t prepared for…
You have my sympathies, best of luck.
Regards
Magdoran