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How to lose 250K $ in one day...

  • Post #1
  • Quote
  • First Post: Edited 1:43pm Mar 5, 2007 11:24am | Edited 1:43pm
As a trader I had never thought that something like that could happen so I would like to share it with all of you.

At Friday I was long at Cable at 1.9563 with a stop loss at 1.9550.
After reanalyzing the state of the pair I realized that I should move my stop loss a little lower at 1.9543.So I deleted the old Stop Loss...and instead of reentering the new Stop Loss I continued analyzing the market because I wasnt so certain anymore that it would go up and thus I was thinking of closing my position manually and reentering at another point when the move to come would have been completed.
Suddenly my Dsl connection was down.At first I thought that it was just a normal disconnection ,you know, one of those that happens once per week.
3 minutes passed and it was still down.So I connected my backup pstn modem to the phone line and tried to connect,but in vain,it wouldnt connect.
10 minutes had passed and the dsl was still down.
I telephone the support line for my connection and they tell "sir there is a general problem in the area but we will fix it in no time ,our technicians are working on it".
Hours passed and still no internet access.In the meantime I was trying to find were I had put my contract with my broker when I made the deposit but I could not find it.If only I could find it I would have called him .
No luck there either.
So I call back the telephone provider support and asked what the hell is happening...
and the answer was ..."We are sorry sir but there will be no adsl for at least 24 hours since there was an accident that caused severe damage to the optical fibers and there is no back up cirquit."
So I take the car and go to nearby town and I see that I had some losses .
So what did I learn?

Jesse Livermore had one rule among others.Always expect the unexpected in the markets.Never be certain that something unpredictable will not happen.
I think now I understand the meaning of this much much better!

Even if everything with your trading is perfect something else totally unexpected can happen so you should always hedge yourself against the odds of something unpredictable happening.
The funny thing is that this was the first mistake after a very long time of successful trading and this stupid thing should happen...

P.S
Fortunately I took some of the losses back today due to the extreme volatility of the GBP/JPY .
I wonder who was the moron that cut the optical fibers and caused all this mess...I would like to have a chat with him
I am not saying that its his fault though.Its my fault ...
The GrandMaster of the Forex Market.
wow, why did't you try to call your broker and set SL by phone?
a hedge could work against you even more as the price could hit the stop and move back up again, sending the hedge in debt.
sorry to hear that

But it seems you are successful in trading so this thing probably just set you back temporarily, since this is a marathon and not a sprint ;-)
Quoting denonline
wow, why did't you try to call your broker and set SL by phone?
I have never traded through phone and thus I had never needed a phone number.I had never thought that something like that could happen.

Its not the amount of money that I lost such a great problem.
The problem is the way that happened.I thought I had covered everything and the only unpredictable thing that could happen was a comet hitting earth!
The GrandMaster of the Forex Market.
I live in an area where internet connections are at best intermittent. My trading style is such that I frequently do not use SL or TP. As a result whenever my connection is down, I automatically close any position which does not have a SL and TP, regardless of whether it is profitable or not.

It is unfortunate to have to do that and sometimes lose out on good trades, but it is still safer than the possible alternatives.

I am sorry about what happened to you, but it may well happen again if you do not adopt some sort of protocol to deal with internet disconnects of more than 5 minutes. S--t happens, but the most important thing is to avoid its happening more than once.
When your trading that amount, always have a backup plan and a backup for the backup plan. For me, I have DSL. If that goes out, I am prepared to switch over to phone line and be back online in two minutes. If that doesn't work, I have a pda. If that does not work, I have a laptop and I can go to the nearest wireless hotel, restaurant or coffee shop that has wireless.

I also have a relative that can jump online and take over my forex trading for me if needed.

The accident was probably caused by someone trading the cable on their pda while driving and noticed the drop and lost control of their car while trying to set their stop loses too.

Good Luck
Quoting WHTenn
The accident was probably caused by someone trading the cable on their pda while driving and noticed the drop and lost control of their car while trying to set their stop loses too.
lol!
Working towards CME membership
EXCELLENT lesson to be learned by this.

Thanks for sharing.

I'm getting out my PDA right now to put the phone #'s in of all my brokers...LOL...AND signing up for unlimited data on my cell.

I have 3 backup connections for my internet...so, I suppose it wouldn't hurt to add a 4th.

Quoting temporary
As a trader I had never thought that something like that could happen so I would like to share it with all of you.

At Friday I was long at Cable at 1.9563 with a stop loss at 1.9550.
After reanalyzing the state of the pair I realized that I should move my stop loss a little lower at 1.9543.So I deleted the old Stop Loss...and instead of reentering the new Stop Loss I continued analyzing the market because I wasnt so certain anymore that it would go up and thus I was thinking of closing my position manually and reentering at another point when the move to come would have been completed.
Suddenly my Dsl connection was down.At first I thought that it was just a normal disconnection ,you know, one of those that happens once per week.
3 minutes passed and it was still down.So I connected my backup pstn modem to the phone line and tried to connect,but in vain,it wouldnt connect.
10 minutes had passed and the dsl was still down.
I telephone the support line for my connection and they tell "sir there is a general problem in the area but we will fix it in no time ,our technicians are working on it".
Hours passed and still no internet access.In the meantime I was trying to find were I had put my contract with my broker when I made the deposit but I could not find it.If only I could find it I would have called him .
No luck there either.
So I call back the telephone provider support and asked what the hell is happening...
and the answer was ..."We are sorry sir but there will be no adsl for at least 24 hours since there was an accident that caused severe damage to the optical fibers and there is no back up cirquit."
So I take the car and go to nearby town and I see that I had losses exceeding 250K $.
So what did I learn?

Jesse Livermore had one rule among others.Always expect the unexpected in the markets.Never be certain that something unpredictable will not happen.
I think now I understand the meaning of this much much better!

Even if everything with your trading is perfect something else totally unexpected can happen so you should always hedge yourself against the odds of something unpredictable happening.
The funny thing is that this was the first mistake after a very long time of successful trading and this stupid thing should happen...

P.S
Fortunately I took some of the losses back today due to the extreme volatility of the GBP/JPY .
I wonder who was the moron that cut the optical fibers and caused all this mess...I would like to have a chat with him
I am not saying that its his fault though.Its my fault ...
Quoting hilmy83
lol!
but on a serious note...days like these that always make me ponder how some traders trade without s/l.

It's scary to think that even though you could be profitable and trade without the brokers stop hunting scheme, one bad crash can wipe out your account. Plus this story about connection problems, etc. really just emphasize my concern
Working towards CME membership
Quoting temporary
I have never traded through phone and thus I had never needed a phone number.I had never thought that something like that could happen.

Its not the amount of money that I lost such a great problem.
The problem is the way that happened.I thought I had covered everything and the only unpredictable thing that could happen was a comet hitting earth!
I don't know who these people are or how they do it but if you dial 411 and tell them the name of your broker some how as if by magic they will connect you with your broker
My god.. sorry to hear that.. and do you know, so many times I have been in the same situation where the DSL goes down.. you wait 10 minutes, nothing, you wait a bit longer..
For the life of me, I have never known the dealing desk number.. and would always go on the internet to look for it.. what a nightmare

I guess one thing to learn is that the internet is just as unpredictable as the cable that it runs along.. ( sorry guys )

This has inspired me to remember to keep putting stop losses in place..

Cheers for the warning.. and good luck in recouping this set back!!
:-)

IF you know what STATE your broker is in...otherwise they get a little snappy.

Quoting 59fender
I don't know who these people are or how they do it but if you dial 411 and tell them the name of your broker some how as if by magic they will connect you with your broker
Quoting mrmikal
:-)

IF you know what STATE your broker is in...otherwise they get a little snappy.
ok here is another number for those who can afford to lose two hundred and fifty thousand dollars and not know what STATE there broker is in 800-555-1212 they can be anywhere in the country if they have a 800 number not a problem might want to write this number down
Quoting 59fender
ok here is another number for those who can afford to lose two hundred and fifty thousand dollars and not know what STATE there broker is in 800-555-1212 they can be anywhere in the country if they have a 800 number not a problem might want to write this number down

seriously how do you not have the number, i dont believe the story, if by stroke of bad luck it is true, that sure does suck, but i cant see it being true having a 1/4 mill in there with no number.

maybe try setting up can and string, smoke signals, telepathy?
Quoting pipple
seriously how do you not have the number, i dont believe the story, if by stroke of bad luck it is true, that sure does suck, but i cant see it being true having a 1/4 mill in there with no number.

maybe try setting up can and string, smoke signals, telepathy?
sounds like a fake story to me also
Quoting pipple
seriously how do you not have the number, i dont believe the story, if by stroke of bad luck it is true, that sure does suck, but i cant see it being true having a 1/4 mill in there with no number.

maybe try setting up can and string, smoke signals, telepathy?
Dont believe the story if you'd like just get a back up plan...

In fact I have some even more unbelievable stories.
The GrandMaster of the Forex Market.
I'd be willing to bet it was a demo account. It beggars belief that someone trading that much size wouldn't have phone numbers and/or the small amount of intelligence required to a) know at least the country and state/province where the broker is located and b) the intelligence to get the number. I hardly think their number is unlisted. And if he lost 250k and shrugged it off, he's implying he has a large account at a minimum of 6x times the lost.

Now if the poster revealed himself to actually be Paris Hilton I'd believe the story.
Hmm,

You must admit it does look a little strange unless of course $250k means as little to you as $250 means to me

The other slightly confusing thing to me is your signature - surely a 'Grandmaster of Forex' would have made plans for any emergency.

If this is true then firstly I'm very sorry and secondly, it is a lesson learnt and a reminder to all that if it can happen it probably will.

Kind Regards
Steve

Quoting temporary
Dont believe the story if you'd like just get a back up plan...
You know it's not polite to insult me like that.
The fact that some of you dont believe it doenst mean it didnt happen.

The reason that I call myself TheGrandMaster of the Forex market is because of the nature of my system.

Its fine with me as I expected that you wouldnt believe it.
Anyway the morals of the story is that you should have backup plan.

The account was real.The size of the account is none's business.
Maybe I did a mistake that i included the ammount that I lost.It made the story unbelievable.

Where am I supposed to know that not even pstn connections would work?

Anyway none told you to believe a story that a stranger writes in a forum.


Now about the backup plans.
I now have the phone numbers stored at a safe location and I am going to have internet through satellite.The only drawback I heard there is that it has a big delay up to some seconds.But i dont care to trade intraday I'll just have it in case of an imergency.
The other thing is that I WILL NEVER leave an order in the market without an appropriate Stop Loss.
There would be times that the whole account would be wiped out if something like that had happened.
The GrandMaster of the Forex Market.
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