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A few beginner questions/horror story

  • #1
  • First Post: Jun 21, 2007 2:59am Jun 21, 2007 2:59am
i opened an account last month after making 50% in two separate practice accounts both over a month. From the start the live account was a messy situation because it was a joint account and my partner was not a help in the least. 90% percent of the account value was mine...but he would constantly bitch when we weren't making enough money. He would call me at 6 am every morning to see how the money was even though he knew i stayed up till 3am or 4am trading and i was sleeping. Not to mention he made several bad calls (i even went home and reversed the positions to turn profit)


yes he is incompetent, and no i don't know why i made an account with him.




A few bad trades later i lost about 5kish. (It didn't help with someone breathing down the back of my neck even though most of the money was mine). nothing but headaches.

I told him to get bent, so now its up to me to salvage the situation. I still have about 2k and i know I'm not going to make a quick fix...It will take at least 6 months to get remotely close to being back on my feet. Have any of you ever goofed this bad?

I have a question about margin percentage. I was using like 20% margin and apparently that it is a big no no. only until too late did i realize this was a crucial mistake. My biggest fault was that i was trying to make very small trades without a stop and the trade would reverse on me, so i was stuck waiting for them to turn around...don't ask me why i made this mistake...it was really dumb. eventually i would be forced to take a MUCH bigger loss than i hoped to ever take...and it didn't help the situation. I have since realized that i am better suited to long trades. If i try a short trade it is with no more than 2% of the margin and there is a tight stop.

My real question is, would/do any of you use over 7% of margin for a long trade? is that a reasonable amount?

I re opened a practice account to help get my feeling back and i am going to try again with my money left much more conservatively. If i can generate 200 pips/month that should be roughly 30% @ 7% margin used per trade (mini account). of course i suppose i can lose 30% with 200 pips as well... 30% of 2k is $600. a 30 dollar lot takes up 7% ($150) of margin and moves at $3 dollars a pip. 600/3=200 etc.

All in all, it is just money and i am not terribly worried about the loss, i am confident that i can recover over time, and if anything this tragedy has taught me to be a more attentive trader...the hard way. The longer it takes me to get it back, the more positive trades i have to make, the better i will be for the future.


Any suggestions, advice, or stories are greatly appreciated


or sympathy, as i am currently accepting e-pity
  • #2
  • Jun 21, 2007 3:31am Jun 21, 2007 3:31am
Duke,

The biggest mistake you made was allowing yourself to trade without a stop. You must have some type of stop in order to protect your hard earned profits or prevent a fatal loss. The amount of margin you choose to use is really dependent on your risk tolerance. You will find people here touting margin anywhere from 1 to 1, all the way up to 400 to 1. Margin means very little if you control your trades and don't allow them to get out of hand. I personally trade at 100 to 1 and have never had any issues. Most people should be fine at this rate if they have sufficient funds and use proper risk management.

Your in a really bad spot with your partner. He is a major distraction to your trading and can really mess up your karma. The best thing you can do is close the account and give him back his portion. Then open back up an account in your name only. I hope things work out for you and remember you can always take some time off and save up till you have sufficient funds. You can't think about trying to make the money back, it will only deter you from making the right trading decisions.

Good luck!

Ro
  • #3
  • Jun 21, 2007 3:42am Jun 21, 2007 3:42am
Quoting Rolandlc33
The amount of margin you choose to use is really dependent on your risk tolerance. You will find people here touting margin anywhere from 1 to 1, all the way up to 400 to 1. Margin means very little if you control your trades and don't allow them to get out of hand.
I believe you're talking about leverage, not margin. Please correct me if I'm wrong.

Quoting Duke Nukem
i opened an account last month after making 50% in two separate practice accounts both over a month. From the start the live account was a messy situation because it was a joint account and my partner was not a help in the least. 90% percent of the account value was mine...but he would constantly bitch when we weren't making enough money. He would call me at 6 am every morning to see how the money was even though he knew i stayed up till 3am or 4am trading and i was sleeping. Not to mention he made several bad calls (i even went home and reversed the positions to turn profit)


yes he is incompetent, and no i don't know why i made an account with him.




A few bad trades later i lost about 5kish. (It didn't help with someone breathing down the back of my neck even though most of the money was mine). nothing but headaches.

I told him to get bent, so now its up to me to salvage the situation. I still have about 2k and i know I'm not going to make a quick fix...It will take at least 6 months to get remotely close to being back on my feet. Have any of you ever goofed this bad?

I have a question about margin percentage. I was using like 20% margin and apparently that it is a big no no. only until too late did i realize this was a crucial mistake. My biggest fault was that i was trying to make very small trades without a stop and the trade would reverse on me, so i was stuck waiting for them to turn around...don't ask me why i made this mistake...it was really dumb. eventually i would be forced to take a MUCH bigger loss than i hoped to ever take...and it didn't help the situation. I have since realized that i am better suited to long trades. If i try a short trade it is with no more than 2% of the margin and there is a tight stop.

My real question is, would/do any of you use over 7% of margin for a long trade? is that a reasonable amount?

I re opened a practice account to help get my feeling back and i am going to try again with my money left much more conservatively. If i can generate 200 pips/month that should be roughly 30% @ 7% margin used per trade (mini account). of course i suppose i can lose 30% with 200 pips as well... 30% of 2k is $600. a 30 dollar lot takes up 7% ($150) of margin and moves at $3 dollars a pip. 600/3=200 etc.

All in all, it is just money and i am not terribly worried about the loss, i am confident that i can recover over time, and if anything this tragedy has taught me to be a more attentive trader...the hard way. The longer it takes me to get it back, the more positive trades i have to make, the better i will be for the future.


Any suggestions, advice, or stories are greatly appreciated


or sympathy, as i am currently accepting e-pity
Have You considered trading micro lots instead of mini's ? You said that long-term trading fits you better, so if You're gonna trade long term You'll have to use wider stops and in my opinion, a 2k dollars account for a swing trading strategy with mini lots seems kind of risky (in my opinion), although I don't exactly know what's your idea of long-term..?

Anyway, I'm sure some other "senior" members will give yo good advise, I just wanted to add my comments.
"I say high, You say low, You say why, and I say I don't know..."
  • #4
  • Jun 21, 2007 4:19am Jun 21, 2007 4:19am
Quoting Rolandlc33
Duke,

The biggest mistake you made was allowing yourself to trade without a stop. You must have some type of stop in order to protect your hard earned profits or prevent a fatal loss. The amount of margin you choose to use is really dependent on your risk tolerance. You will find people here touting margin anywhere from 1 to 1, all the way up to 400 to 1. Margin means very little if you control your trades and don't allow them to get out of hand. I personally trade at 100 to 1 and have never had any issues. Most people should be fine at this rate if they have sufficient funds and use proper risk management.

Your in a really bad spot with your partner. He is a major distraction to your trading and can really mess up your karma. The best thing you can do is close the account and give him back his portion. Then open back up an account in your name only. I hope things work out for you and remember you can always take some time off and save up till you have sufficient funds. You can't think about trying to make the money back, it will only deter you from making the right trading decisions.

Good luck!

Ro
yes, i have already done that. Its helping my peace of mind a lot! I realized my mistake with the stop and i am correcting it in this practice account run to apply it to my real trading in a month or so
  • #5
  • Jun 21, 2007 4:54am Jun 21, 2007 4:54am
ur current strat of 30% per trade...is not very advisable, considering you have lost so much. on paper 600 loss looks very acceptable but when u really face is the pain is still as real as burning ur account. Well at least you havent had a margin call yet. We'll drink to that.
  • #6
  • Jun 21, 2007 8:31am Jun 21, 2007 8:31am
Quoting Duke Nukem
From the start the live account was a messy situation because it was a joint account and my partner was not a help in the least.... He would call me at 6 am every morning to see how the money was...

Any suggestions, advice, or stories are greatly appreciated

or sympathy, as i am currently accepting e-pity
Trading for a living is hard enough if you are doing for yourself nevermind Trading for other people.

I Traded a Futures Fund {40 Investors} for 5 years and got the same phone calls. "I heard blah blah blah, should we be buying corn?"

Worst year they had {4th} was a positive 25% and you should have heard the bitching. "How come we Only Made 25% this year?" That's why I shut it down after the 5th year and now Trade solely my personal accounts.

So, I don't feel sorry for you for losing some funds but I DO feel for you having to put up with the idiot.

Good Luck on the road back up.
  • #7
  • Jun 21, 2007 11:07am Jun 21, 2007 11:07am
I definately recommend trading by yourself, as well. It may seem like it makes sense to pull funds together to create a larger balance to begin trading with, but as you found out, two sets of psychology can never mesh as one.

If you are left with 2k, you are fortunate. It's certainly enough that you can recoup your losses in a reasonable amount of time. Truly, be glad you didn't lose more than you did, take what happened and use it as a learning experience and realize that every good trader has lost money. That's how you learn to become a successful trader. Trading on a demo account is important, but honestly, no one trades the same way on a demo, as they do with a real account. So decipher what really happened and break down your mistakes and do NOT repeat them when you start over!!!! You may use your demo account to get your bearings back, but again, you'll still trade differently on your real account. Lets face it....you have nothing to lose when you place that buy button on your demo account, yet everything to lose on your real account!

The best thing you did was to cut your losses soon and not let that scenario drag on with your friend.
Good luck and good trading!
  • #8
  • Edited Jun 22, 2007 1:21am Jun 21, 2007 12:35pm | Edited Jun 22, 2007 1:21am
thanks guys. I agree, the partnership was my worst mistake. I realize my track record isn't so great at the moment, but i am confident that i can bring it back. I'll definitely keep you guys updated.
  • #9
  • Jun 21, 2007 10:51pm Jun 21, 2007 10:51pm
Quoting Duke Nukem
...I'll definitely keep you guys updated.
Cool . Please do so and remember that there will always be help right here @ FF.
  • #10
  • Jun 26, 2007 6:19am Jun 26, 2007 6:19am
Quoting Bemac
Worst year they had {4th} was a positive 25% and you should have heard the bitching. "How come we Only Made 25% this year?" That's why I shut it down after the 5th year and now Trade solely my personal accounts.

omg, that's amazing indeed

it is common that people hire smarter one to do their job
  • #11
  • Jun 26, 2007 6:42am Jun 26, 2007 6:42am
I think first of all it would be a good idea to give your friend his money back as you will lose not only the money but also the friendship (and money cannot buy rel friendship )

If you can pay him back now it will be better.
  • #12
  • Last Post: Apr 8, 2020 1:52am Apr 8, 2020 1:52am
Quoting Duke Nukem
thanks guys. I agree, the partnership was my worst mistake. I realize my track record isn't so great at the moment, but i am confident that i can bring it back. I'll definitely keep you guys updated.
I'm sure you will,wish you all the luck!
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