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Your Blow Out - Why?

  • Post #1
  • Quote
  • First Post: Mar 8, 2008 9:16pm Mar 8, 2008 9:16pm
For those of you who actually blew out an account, how much did you lose?

What would you say you did wrong?
The ForEx giveth and the ForEx taketh away. (more taketh than giveth).
I was on my way to blowing out my account a long while ago. I simply jumped in too fast and tried to apply a simple scalping system to my trades without taking into account what my psychology would do to me. I also had no concept of money management...NONE! I jumped into the market with a $5000 account looking to make $20/pip right away.

I think the most important aspect of trading forex is money management. Even if you have a system that performs well only 55% of the time, money management will ensure your account grows.

Being under capitalized is also a problem but a lot of people can't do anything about that so it's best to realize that modest gains should be an immediate goal imo.

Cheers
I've had a small live account for the past few months, haven't had muc time to trade, but I'm around breakeven. MM is important. Even making some mistakes I don't get into too much drawdown, as 1% is risked EVERY trade.
Quoting Wacky Canuck
I was on my way to blowing out my account a long while ago. I simply jumped in too fast and tried to apply a simple scalping system to my trades without taking into account what my psychology would do to me. I also had no concept of money management...NONE! I jumped into the market with a $5000 account looking to make $20/pip right away.

Cheers

That's what We call the excitment & Main Reason of blowing out the newbie's account...
--No Proper Sytem...
--No Money Managment Rules...
--Lot Of Excitment...
--No Proper Demo Practice...
--Experiment's and testing new and lot of stratigies on real...Instead of 1st Practicing hard on demo...Etc , Etc...
Forex Market win's Here...
Exactamundo Umairs. It's a common mistake I think and it's a silly one as well. I came to forex from stocks and I think what really attracted me right away was the trading hours and the incredibly liquidity. I found it irresistible and so I jumped in right away.

Thusly, I quit predictably almost lost all my money. It's easy to jump into forex and it's even easier to lose all your money really quick.

Always develop a money management plan that suits your level of acceptable risk. Always demo trade. Always read extensively about a market that can wipe out your account with just a 0.05% move in many cases...not at all like stocks.

No need to roll your eyes...I know it was a noob mistake but thankfully I'm no longer a noob...still a novice but no longer clueless.

Cheers
Quoting Wacky Canuck
Exactamundo Umairs. It's a common mistake I think and it's a silly one as well. I came to forex from stocks and I think what really attracted me right away was the trading hours and the incredibly liquidity. I found it irresistible and so I jumped in right away.

Thusly, I quit predictably almost lost all my money. It's easy to jump into forex and it's even easier to lose all your money really quick.

Always develop a money management plan that suits your level of acceptable risk. Always demo trade. Always read extensively about a market that can wipe out your account with just a 0.05% move in many cases...not at all like stocks.

No need to roll your eyes...I know it was a noob mistake but thankfully I'm no longer a noob...still a novice but no longer clueless.

Cheers
Can You Believe it ... I Traded on demo for almost two year's... Just For practice... Ya I know, I know ... Some came on real with just few month's practice, Some with Little more or less... You Might be thinking that two Year's practice on demo is too Much lol. Meanwhile i was also and still busy with my job...But believe me In My Two year's of demo Practice... I Just Learned about...
--- My Own Made complete system...
--- M-M Rules...
--- Exact Entry Point...
--- Some of my own made rules...
& Other Related thing's.... Now It's working very well For me...
I alway's PRACTICED my all new stratigies and experiment's on demo... & didnt came on real with them until i feel myself getting habitual of some good pip's...I accept , Winning & Losing is a part of this game but I Think You'll Be successfull Only if your strong trading sense with your system is successfull for you...
GoodLuck For your Trading My Friend...
2 years! Incredible. Congratulations to you my friend, I think it takes a lot of discipline to take the road you took. I demoed for a while to be sure but not as long as two years.

Honestly the longer you demo, the more you will learn about how to trade fx and how to trade according to your personality. Of course you'll learn all the technical bits fairly quickly such as MM but you will more importantly learn about how you act in an fx environment.

Good trading to you Umairs and everyone else.

Cheers
I didn't demo for very long. About 3 months and then everyone kept saying..."ohhhh, real money is much different than demo" "Real money is like Demo in Dolby" So with all of this talk I had to see for myself. I went in and it wasn't any different. What I noticed was that I couldn't make any and didn't lose any...I just kept breaking even and couldn't move past that. That's when I quit live and went back to demo to try another system. Trying one now and if I can manage to double my demo account with proppery MM then I will take it back to my live account. Figure I will be on demo for another 3 weeks at the rate i'm going.
The ForEx giveth and the ForEx taketh away. (more taketh than giveth).
i have blown out every account i had. it wasnt until a few weeks ago that i discover why i blown out every account. it was over leverage and over trade and risking to much margin on trades. i was using to many indicators that worked some of the time but didnt work most of the time. my stops always got hunted to. the list goes on im afraid!

so i give this one more try now. i was fortunate to learn why i blow out accounts all the time and what i can do about this to fix my trading. this will be my fourth week of hopefuly no losses. three weeks prior was very profitble thanks to what im learning about leverage and risk and using price actions.
Quoting ApneaBlue
What would you say you did wrong?
1. Over-leveraged.
2. Under-capitalised.
3. Had no respect for the risk associated with the forex.
Carpe Divitiae
  • Post #11
  • Quote
  • Last Post: Mar 10, 2008 10:25am Mar 10, 2008 10:25am
I didn't actually blow an account, only a 50% drawdown, but I had lost over $20k so I think this qualifies...Reason why: Not testing system (forward or backward) through all relevant market conditions.

Going back a few years, I had spent a long time going from system to system on demo accounts with no success. Then I finally found my own system to trade.

I had backtested it from a 60 min chart for about a year and then demo tested it for about another 6 months. Problem was the market was pretty friendly to my system during the testing period, even when I was trading live on a mini account it was going well. When I started to trade on full lots the system was not performing to the same consistency as before, hence the drawdown...Lesson learnt. Moved on.
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