How A £50,000 Intraday Swing Finally Taught Me To Respect Risk ❗
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- Опубликовано: 18 июл 2020
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Why is it so important to manage risk when trading? Many years ago I was trading the DAX and I liked to be very aggressive on trades. I was leveraging a lot on the profits on the deal and was scalping my position as my trade went my way. This meant I would get stopped most of the times but when I got it right I would get it seriously right. How do you manage risk when trading? OK.
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Well said .RISK BEFORE REWARD
i had a similar issue with my broker earlier this year when crude oil was going crazy, i was long with more buy stops order & trump tweeted something about war with iran and that shit pumped up HARD i was up like 60% but couldnt close, my take profits werent working, then it went down & wiped me out, luckily i recorded that with my phone & my broker gave me cash back with some profits too.. it was a horrible psychological process
Your broker screwed you
Thank you for reminding us about the perpetual risk of the business
Mark, thank a lot to you and your team! Because of your channel and price action course I'm in a way better position with my trading than I'd otherwise be. Appreciate all you do guys!
"This business will always be about Managing Risk. The minute someone forgets that, is when they get taken out to the woodshed & swiftly reminded about what that really means."
"The one time you need to use the Fire Exit at the cinema, so does everyone else. Sell when you can, not when you must." 😬
"Risk is a 4-letter word ending in -K."
everything is a big learning lesson, a few years ago, i was in a share, it hit my stop loss which i hadnt put in as an order. So it was like 10:15am, i had just woken up, was in bed and went on the broker app to sell all my shares out of the trade for a $400 loss approximately, however i hadn't hit the "sell" tab, it was on the "buy" tab by default and bang, by that, i accidently doubled my position and the stock crashed harder even more, in half an hour was at a loss of 8k. That didn't kill my account but it scared me from trading for a long time especially since back then, i wasn't really using a system or strategy, basically gambling by going into trades based on "feel". It was a needed wake up call to look at myself and seek proper education on trading and doing it the right way
I lost one trade because the internet down. Thanks for the knowledge your sharing with us
Excellent story 👍
Thank you for sharing.
Great video, thanks!
This week I experienced something similar, but not exactly.
I closed my trade and went to bed and I was sleeping well.
The day after I turned on the computer 30 minutes before the opening bell 🔔
What the heck was wrong, I have lost lots of money, because now I had a position on that I have never accepted.
The reason to this huge error was because my broker didn’t remove my stop when I closed my position the day before.
Then my stop was triggered (even when I had no position on) and I was filled.
So be careful how your broker is handling your stops.
Because of this I am changing to another broker.
I don’t know if I should mention the name of the broker, which I will certainly not recommend.
Great lesson!!
great vid, would love to hear your views on scalping out of postion b4 the take profit?
Thanks for sharing these stories Mark. One of the traits of trading is you never really understand unless you go through it and it's when you're exposed you realize the opportunity cost of doing a big trade.
Thank you for sharing your experience Mark Hopefully the lesson will save someone from a similar experience.
As traders we always need to consider the risk involved before and during every trade
Keep the great videos coming
Take care
Thanks for sharing your story. I’ve already experienced a little of this pain. Seems like the internet and my charting software want to bung up at the just the worst possible time.
Good story Mark. I hate stop losses but they are great once in a profit. And they do force you to accept a manageable risk
If the platform won’t allow you to exit the trade, could a viable alternative be to enter the same market with equal size in the opposite direction? You’d have to pay the commission but the cost is significantly less than if it goes against you.
Any thoughts on this?
I would find one of my broker’s offices and burn it to the ground if they didn’t let me out
I don't think that was a coincidence, your broker did you on that close out. They'll just call it slippage, but it probably wasn't.
It's more common than you think.
Wouldn't be at all surprised if the systems are configured to do that automatically.
I've had countless issues with so called instant execution OTC systems and happens more frequently the bigger the trade position.
Always just use the stops, it avoids that problem.
6:00 Damn!!! Sh*t is about to hit the fan!! Been there, donde that! One can only learn those lessons by the force of the mighty whip bashing your account! What a great video, this kind of stories gives you the real deal about trading.
Examples from your previous personal experience is the great continuation of your series, Mark. I want more horror or joy stories from your past :))
Thanks Mark. Hidden risk most assume isn't there.
Thanks mark you're awesome
Over what time period did this happen?
The backup plan mentioned here was good. But what about having a "disaster stop" ?
For example, put your stop after several support/resistance levels, ie. you see the odds reaching this level low, however, if it happens, it at least avoids wiping out your account, because the market may actually continue even further
Been there. I always you SL now. I use to not use stops and just say that I’ll get out when it drops to a certain point. But then emotions take over “ it may go back up” or “ I’ll just ride it out. Blew up my account both times thinking like that.
To trade big swings like this you need to be prepared for your trading balance to reduce by -90% and be comfortable with that
Eg your open positions would only need to be less than 10% which would give your trading balance 90% equidity / liquidity for the market to absorb as it fluctuates like huge waves on the sea etc
The problem occurs when trading big swings like this usually is that when the profit increases people tend to use liquidity or equity to increase position size thinking the open position cant go down as fast as it went up but it can very easily but when it goes down after increased position size but their tends to be insufficient equity in trading balance which when price comes down just as fast tge insufficient equity in trading balance busts trading balance to
£0
I learned this lesson the hard way as well. Robinhood crashed about 8 times throughout the coronavirus dive and I was stuck holding the bag! Cost me 1.5k. Now I have three brokerage accounts with a couple grand in each. Helps me get around ptd rules as well. I've lost about 1k from being day trade locked on a couple trades.
You are absolutely right, watch position it sounds simple but many traders don't have that discipline. Why is this? My opinion is most traders look at the opportunity side than the risk(loss) side. Greed supercedes bankruptcy i really don't know why.
Wow...what a horrible situation!
This guy is so cool.
Wow! What happened with the broker? Did you try to get some sort of arbitration?
sometimes, u have to learn the hard way.
did the same strat with silver, went from 2k to 26k then lost it all haha
Been there, done that...
The stuff of nightmares!!
The graph you drew is literally what happened to me in my KODK trade. Ordered a sell at the middle of the drop, ended up getting a sale price at the bottom of the dip. Lost $800+ dollars.
But Mark, surely broker owes you 20k. You said you could end up with -100k bill, well send broker 20k bill.
Yep the broker for sure. In today's world I only consider the biggest brokers with the best technology. So basically 5 or 6 brokers more or less. $50,000 or pounds should be like a penny to the average person on the street. Of course in this age of no commissions the smaller guys are closing up shop. At least you stayed in the game and lived to tell the tale!
Were you not pushing your Stoplosses to breakeven or a little in the money before exiting ??
If you blew your crypto trading account on March 12, 2020..... Hi :)
I’ve been using IG and they seem ok but I’d like to hear if anyone has any horror stories to make me aware of issues I haven’t come across yet
Used them for a few years, platform tends to freeze on busy days especially when US sessions starts that means no response closing trades etc. A bit slow on withdrawal but not the worst. Have yet to have anyone answer me when I call their support number but their email and chat is usually decent. Webtrader interface can get laggy to the point where you need to refresh the tab for orders to be marked as executed. They will often close certain markets and restrict them to closing only (Probably risk and Futures related)
Overall decent enough for someone who likes leverage and holds positions for a few months, not sure if I would dare to daytrade though.
6:00 lol
Wow! scary stuff
Even though you overleveraged your account. More to the point brokers back in the day would not allow traders to close out trades with sizeable profits, dodgy stuff they pulled. These days any reputable provider will allow you to close out or hit your limit to be filled. As they a regulated a lot more.
Someone may have mentioned this, but now we have cell phones, thank goodness. You can lose internet and power and still be able to get out of your position. I have always had a least 2 brokerages and I have them open at the same time and on speed dial on my phone. Younger people who have not experienced as many issues are likely to ignore this as 'unlikely' and not take it seriously. The problem is that it nearly always happens in the most volatile times in the markets.
Remember being long Dow when Fannie and Freddie went tits up over the weekend. A focusing moment.
Neverknew that could happen.
Brokers WILL shaft you at the earliest opportunity.
And they do it legally.
🧡💛💚💙 Shoutout to Mark for giving us stories like this. We love hearing these Mark, please share some more! 🧡💛💚💙
Good post, Mark. Caveat Emptor. The market is the market but beware your friendly broker :)
The fact that you couldn't get out of that awesome trade as complete BS. It just makes you think that things are manipulated into the paper of the brokers and whatever other scumbags are involved.
Who's fault was it mark. Was it the brokers fault. And can we ever sue the broker if we are forced to endure a big loss because their systems were down.
Is Pepperstone genuine platform?
Yes, they have a good reputation amongst traders and are properly regulated (by both the UK FCA and ASIC in Australia).
@@ukspreadbetting Thank you
Thats horrible. It sounds like you were manipulated by your broker. Because essentially you did makr a great move but it wouldn't let you execute. Thats some bs mark
That's a shame what happened to you. As you have mentioned technology is better than what it was a few years ago. If you tried to sell when the market is still going up it should execute the order because effectively your shares are then being sold on to someone else who is prepared to pay a higher price for them. What you experienced can that still happen now with today's technology using apps like Trading 212, Freetrade and Webull?
Definitely and there is a higher risk of it happening with these kind of brokers. Best to have multiple brokers.
I will open an account with a second broker!
Sounds like you got scammed by the broker
🧡💛💚💙 I know swings like this all too well. In my 11 yrs of day trading I've had some shockers. Fighting my way back from -$500,000 once (October 15th, 2014 on the Tnote rally), also a few times -$40,000 ... -$60,000 and one -$120,000 which was really hard (August 2015, when S&P500 dropped -7% and went Limit Down)
Theres only one way around this... *always commit to taking losses 100% of the time. Discipline is not good 99% of time, the market will blow you apart. It must be 100/100 times you take ur loss* 🧡💛💚💙
Your broker was a criminal.