Same story different scenarios...only that mine got a margin call, twice hahaha. Learnt my lesson then and there...thanks for sharing!
From my point, I haven't thought about this. So far I was doing everything right, risking between 1 and 2% on each trade, scaling in positions, etc. Everything was good, nice returns, small drawdowns... until last week.
GBP/JPY was my executioner and of course - my greed and "conviction" that I was right and knew what the market will do.
I read tons of articles, books, topics on MM, capital preservation, psychology, planning, etc.
It just so happened I stayed at home sick since last Tuesday. With nothing better to do I was keeping the trading platform open and checked prices every now and then out of boredom.
On Wednesday the party began. I decided to lower stops, because of course, GY is going up to break 243, I knew it, it was inevitable. On Thursday morning I was in profit above 242, but it wasn't enough, I wanted more. I was due to prepare a report (I manage small funds for a group of investors, with a new load ready in the bank account for a transfer to the broker - this was luckily not yet done). The balance on the trading account was not very high, thank god.
After Asia on Thursday the correction began, we all know how much it dropped till Friday. When I got to a couple % drawdown, I said, no, it's going to start going up, I'm certain... it didn't. I started to hedge, only to get out too soon, get more negative balance.
In the end it was me, my account, my stupid decisions and greed and a 70% drawdown.
The hardest thing was writing the monthly report for the investors. It is a lession I will never forget (I hope). Never again will I be on the computer with the platform open and watching the price action go (I don't scalp, I trade intraday, but even better I like long term positioning).
What is done is done, there is no way to mend it, only to start again, with a huge % to gain, before getting a +/- account balance, then we start accumulating profits again. It hurt and it hurt bad. The worst was that some of the investors are very heavily banked so to speak and could have been my future in the long term if I proved them with good long term (at least a year or two) results.
Anyway... it seems I had to learn it the hard way...
But still I think that compounding gains is the way to go, you can risk less to earn the same sum of money or risk the same % and get more money (keep the investors happy in both situations).
But I have decided to keep the new investment money in the bank account for a week or so and to inform all other (new) investors what happened and if they still want in...Ignored