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Why do traders blow a winning account?

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  • First Post: Dec 12, 2011 8:20am Dec 12, 2011 8:20am
Hi

I am seeing in TE many people trading nicely and gradually increasing their profit, all of a sudden, most of them throwing away all their profit and major portion of the capital in couple of trades (even after trading more than a year). I am on demo account and planning open real account next month.

I was wondering what makes them to give away all their earning in a single trade? I mean how do they lose their discipline all of a sudden?

usasa
Weigh well output the loss and gain And proper action ascertain
Quoting usasa
Hi

I am seeing in TE many people trading nicely and gradually increasing their profit, all of a sudden, most of them throwing away all their profit and major portion of the capital in couple of trades (even after trading more than a year). I am on demo account and planning open real account next month.

I was wondering what makes them to give away all their earning in a single trade? I mean how do they lose their discipline all of a sudden?

usasa
first of all their wins are overleveraged. their losses are overleveraged. they do not have good risk management and trade management. greed drives them to overleveraging.
Have I got something on my face, SOLDIER?
Quoting usasa
Hi

I am seeing in TE many people trading nicely and gradually increasing their profit, all of a sudden, most of them throwing away all their profit and major portion of the capital in couple of trades (even after trading more than a year). I am on demo account and planning open real account next month.

I was wondering what makes them to give away all their earning in a single trade? I mean how do they lose their discipline all of a sudden?

usasa
I had that happen to me last year.
The reason in my case was overconfidence. After started being consistent for long periods for the first time in my trading career, I became overconfident. So I thought that my trades HAD to work since I was SO good, which led me to keep moving my SL further away until it became very painful to close the position. I had 2-3 trades like that before realizing what I was doing wrong and fixing it.
This little devil (overconfidence that is) is still there. I just learned how to ignore him.....
Quoting bumapatria
first of all their wins are overleveraged. their losses are overleveraged. they do not have good risk management and trade management. greed drives them to overleveraging.
In many cases their wins are not over leveraged only their losses are.

I assume their consecutive losses are making them to over leverage and revenge trading. I am thinking of some systematic approach if there are consecutive losses. I know if some x % of losses on a single day shutdown trading. any other suggestions?
Weigh well output the loss and gain And proper action ascertain
Quoting kostas1
I had that happen to me last year.
...
This little devil (overconfidence that is) is still there. I just learned how to ignore him.....

Is your little devil popping up after couple of losing streaks?
Weigh well output the loss and gain And proper action ascertain
Quoting usasa
In many cases their wins are not over leveraged only their losses are.

I assume their consecutive losses are making them to over leverage and revenge trading. I am thinking of some systematic approach if there are consecutive losses. I know if some x % of losses on a single day shutdown trading. any other suggestions?
most of the time iu go positive on a day then u start losing. i stop and when my % or pips made is close to breakeven thats sign to stop where ur scale of baalnce can go from mere profit to big loss.
Have I got something on my face, SOLDIER?
Quoting usasa
Hi

I am seeing in TE many people trading nicely and gradually increasing their profit, all of a sudden, most of them throwing away all their profit and major portion of the capital in couple of trades (even after trading more than a year). I am on demo account and planning open real account next month.

I was wondering what makes them to give away all their earning in a single trade? I mean how do they lose their discipline all of a sudden?

usasa
Problem is that people at starting follows a particular strategy which result them in good profit but afterwards they get overconfident and they do not follow their own strategy which result them to lose their money. I have met few people having same problem and they are realizing about that but still cant control it. Its like driving a car, if you are going at economy then u surely reach to your destination but over speeding will crash you. So the same thing here greed and overconfidence result them to crash.
Simple

Failure to cut losses. Holding on to a trade in HOPE.
If in doubt GET OUT easy to say, but we all fall for HOPE.
Quoting courtneywild
Simple

Failure to cut losses. Holding on to a trade in HOPE.
If in doubt GET OUT easy to say, but we all fall for HOPE.
true. thats why people widen stops or not even use them.

its about going in minimized risk not thinking reward. think lowest risk to go long or short and the game to me is acually management of risk.

always use good MM and trade managemnt.

remember that a 100% return on one trade can mean -100% as wel.
Have I got something on my face, SOLDIER?
Quoting courtneywild
Simple

Failure to cut losses. Holding on to a trade in HOPE.
If in doubt GET OUT easy to say, but we all fall for HOPE.

nothing wrong holding a trade in hope..people lose because they arent strong enough to stay convicted to trade decisions, changing there decision at a drop of a hat
Why do traders blow a winning account?

greed and fear,starts playing with traders mind
Trade responsiblypatience is the key/Swing trader
Quoting Incrediblle
Why do traders blow a winning account?

greed and fear,starts playing with traders mind
Trading Plan, discipline, etc, etc. are all intact as long as the equity curve is heading north.
Weigh well output the loss and gain And proper action ascertain
Quoting usasa
Hi

I am seeing in TE many people trading nicely and gradually increasing their profit, all of a sudden, most of them throwing away all their profit and major portion of the capital in couple of trades (even after trading more than a year). I am on demo account and planning open real account next month.

I was wondering what makes them to give away all their earning in a single trade? I mean how do they lose their discipline all of a sudden?

usasa
two reasons:
1. they don't have an edge in the first place. All the recent performance of the account was pure luck.
2. if they have an edge, then risk management is way out of place.

But it is more likely that they don't have an edge in the first place.
Quoting Custos
two reasons:
1. they don't have an edge in the first place. All the recent performance of the account was pure luck.
2. if they have an edge, then risk management is way out of place.

But it is more likely that they don't have an edge in the first place.
very possible. i see many making 100%+ a day and that is dangerous and imo not proper RM.
Have I got something on my face, SOLDIER?
greed !
Quoting usasa
Hi

I am seeing in TE many people trading nicely and gradually increasing their profit, all of a sudden, most of them throwing away all their profit and major portion of the capital in couple of trades (even after trading more than a year). I am on demo account and planning open real account next month.

I was wondering what makes them to give away all their earning in a single trade? I mean how do they lose their discipline all of a sudden?

usasa
could be a number of things, inconsistent position sizing or trading without a stoploss( or failing to exit where they were supposed to)

although unlikely- you could risk 500 pips to make 5 pips, if you did this you would have a lot of winners, with the odd giant loser. probably an extreme example though.
Quoting nAVIN2007
nothing wrong holding a trade in hope..people lose because they arent strong enough to stay convicted to trade decisions, changing there decision at a drop of a hat
i would agree. hope will not be a problem unless you think that it will magically make the market move in your favor.

when i enter a trade i hope it will be a winner, but know dam fine that this will make no difference to the way the market moves, therefore dont rely on hope to win.
Quoting usasa
Hi

I am seeing in TE many people trading nicely and gradually increasing their profit, all of a sudden, most of them throwing away all their profit and major portion of the capital in couple of trades (even after trading more than a year). I am on demo account and planning open real account next month.

I was wondering what makes them to give away all their earning in a single trade? I mean how do they lose their discipline all of a sudden?

usasa
Because the Perils are unreal and they come at you in different number of ways - It's a very difficult Profession . And BTW , don't believe the BullSh*t about how demo trading is very easy to do and very different from Real-live trading .All you have to do is ask that person to " show you just how easy it is " .. - Chances are you'll never hear from that person again..lol
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i honestly most of the time do not use a stop loss but i know where to exit and plan it pre-trade.

in a way yes i use a 'stop loss' everyone has to imo.
trading shouldnt be treated as gambling.

its Smart gambling.

like what tao said, yes live trading has that pulse of emotion kicking in.

demo u can leave a trade and see it go into profit blah blah it barely happens live due to the decisions made etc....

it really aint easy.
Have I got something on my face, SOLDIER?
Quoting usasa
Hi

I am seeing in TE many people trading nicely and gradually increasing their profit, all of a sudden, most of them throwing away all their profit and major portion of the capital in couple of trades (even after trading more than a year). I am on demo account and planning open real account next month.

I was wondering what makes them to give away all their earning in a single trade? I mean how do they lose their discipline all of a sudden?

usasa
I think what you are seeing in trade explorer is traders actually taking money from their account. When they make a withdrawl it shows it as a loss even though it actually isnt.. Maybe they do blow their accounts but many traders that have confidence to show what theyre doing aren't going to blow an account that easily..
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