It’s not an easy situation when you lose $10,000 in one day. I remember like it was yesterday when I decided to take out $25,000 in student loans in order to start this new day trading venture nearly 10 years ago. One of the goals that I had of for the Day Trading Academy after I was convinced to start training again was to be able to have a group of people teach, develop new strategies, and help others alongside me.
I don’t think that programmers or businessmen know how to day trade and for that reason they shouldn’t be developing any strategies since they don’t know how the market works .
I choose to make close connections with day traders that are trading live and making money because in the end, those people that are experts in the market, not programmers and businessman.
I have a great group of traders at The Day Trading Academy in addition to a phenomenal group of students that continue to learn. There is a great mix of expert traders that are trading live, new traders that are learning the ropes, and others that I would still consider beginners that are making money with our beginner system.
I also have day trading partnersthat help me to optimize trade setups in addition to help me with my own trading. In order to be successful day trading we have to understand that day trading is a continual learning process and if you have a group of people to help you it will allow you to become more successful.
I owe my success to keeping an open mind
If there’s one thing that I have learned from day trading for nearly 10 years it’s that anyone can teach you something, including brand new traders. I have recently made updates to the beginner strategy that allows people to make money while they are still learning to master the markets.
That idea came from a trader that’s been with the Day Trading Academy for only three months.
The first thing that we have to understand when you lose that amount of money is why it happened. Day trading isn’t easy, especially because of the psychology that comes with it, if it was easy then everyone would be day trading. Since we are human we are always going to make mistakes, the idea is to identify those mistakes and fix them quickly.
Understanding that were always going to lose money is something that is crucial, I have lost money and shared it willingly via the day trading blog. We should focus on winning rather than losing money because if we are able to make money most of the time, losing money isn’t a big deal.
My trading partner’s $10,000 loss was due to an Internet problem, not a bad decision or incorrect analysis. I have not had these kinds of problems before but my trading partner is using satellite Internet and when the Internet went out there was news that affected the crude market. Another issue was that when we to tried call the brokerage firm in order to exit out of the position no one attended the call.
By the time the position was closed the account was drained and the account was literally blown out.
In this kind of situation you have to consider the reason for the problem, in this scenario it was the Internet, followed by news, and then the brokerage firm. When trying to reconnect to the Ninja Trader platform the stops and targets were removed creating the perfect storm.
It wasn’t a bad decision or bad trading.
Considering that my trading partner trades crude with more focus on fundamental analysis, stops and targets are larger, and these kinds of things have happened in the past due to the erratic nature of the crude market.
If you ever have a really bad day trading and have your confidence tested sit back and think about these things. It’s hard to get back in the saddle with 100% confidence when you have this kind of situation, the only thing we can do is consider the variables and ensure ourselves that these things happen.
Day trading is as much about losing money as it is making it, the real traders who are successful are the ones that are able to get over these kinds of losses and keep at it.
Pete September 26, 2012 at 11:57 am
I would call it bad trading after being 6% down on the account, trading 7 CL contracts with a $12.000 account. Maybe a daily loss limit would be a good idea. And if you can’t reach your broker, maybe it is time to look for a new one.
Marcello September 26, 2012 at 4:56 pm
Pete… that has never happened with my broker and would disagree with the bad trading comment. My partner makes sure to wire out all profits daily or as they occur and my partner is typically profitable roughly 80% to 90% of days.
Jason Perkins September 26, 2012 at 12:22 pm
What did Mirus have to say about not answering the hotline number????
Marcello September 26, 2012 at 4:54 pm
Still working on that Jason… It was my partner so its third hand information.. need to find out exactly what happened
shani stewart September 26, 2012 at 1:45 pm
Marcello,
This was a very good post on keeping your confidence up when faced with a setback. I remember something you said a while back in one of your posts regarding windows 8. Since wiindows 8 is designed for tablets do you think its going to be possible to trade emini’s with a tablet in the near future?
Thanks
Marcello September 26, 2012 at 4:56 pm
I think it will be possible yes as long as the trading platforms adjust to the new software.. I would like to see them build software for the Ipad.. who wants a windows tablet? lol
Chrispy September 26, 2012 at 6:25 pm
I thought the stops and targets would have been submitted to the broker when entering the trade instead of being kept locally on the traders machine. So can anything else to get out of a trade if the internet goes down and that broker doesn’t answer the phone?
Marcello September 26, 2012 at 9:04 pm
The problem was that he supposedly tried reconnecting and something happened with the orders when he was trying to reconnect.. you are correct that if you get disconnected the orders are with the broker not just on your machine
Chuck September 27, 2012 at 12:30 am
This sounds like a major issue with NinjaTrader. That should NOT happen. The software should not be canceling orders that have already been submitted to the broker and/or exchange. Maybe he accidentally canceled them himself when he tried to reconnect? If not, I hope he chases this up with NinjaTrader support and find out what the heck went wrong.
By the way, this is why you should never use a volume trigger stop when trading. The order is held locally and would be useless in a situation such as this. Beware!
Marcello September 27, 2012 at 9:09 am
Chuck… we didn’t have a volume trigger stop on.. they were hard stops but I do agree with you we have to be careful to the volume trigger setting up stops at the home machine instead of the broker servers
guilherme September 26, 2012 at 11:45 pm
great great post! and the true is ”shit happens” …
DaveG September 27, 2012 at 1:27 am
…”anything can happen”…
José September 27, 2012 at 8:12 am
Hi Marcello, as a trader myself I know this is a very unfortunate event. Nonetheless, trading Crude Oil with a 12k account, where each point is worth 1k, in my humble opinion, is over leveraging your position. It shows really poor money management, because even in the best scenario, if you trade only one contract, using 1 point for stop loss, you are risking around 10% of your account. If you trade more contracts, you are asking to have your account blown in a matter of time! That’s my 2 cents.
Marcello September 27, 2012 at 9:15 am
Jose… I understand what you are saying but my trading partner has been able to do quite well with the account by using a proven technique. We should always have leverage in mind but you aren’t considering the management rules that he uses nor the kind of activity & wins that he had that day. Who is to say that is okay if he had more money in the account? Those are personal margin rules and with the crude market moving the way it does and using a style that my partner uses we always choose to keep the account size small but still trade using the same technique. One of the things that you will realize Jose is that trading isn’t always about the money, ie: leverage and how much money you have in the account, we can use unique tools like transferring and withdrawing funds as part of your strategy in order to minimize risk and maximize your reward. With 7 contracts on the table thats roughly $1700 per contract for crude which means that he could take one 7 ticks against his trade, your not realizing what his risk management principles are or even how big his losers are. If you have much larger losing trades I understand but outside of that I dont see an issue with it. Even if you had more in this account the possibility of blowing it out is still possible if the same thing happened and you couldn’t get out of your position and couldn’t connect to the internet. Its not about the money Jose, its about many more things like risk management principles that go far beyond the use of just stops and reward management techniques that allow you to win more than you lose. You have to plan for these situations which is why we have been able to do so well the last 10 years. Thanks for the insight I appreciate the comment.
José September 27, 2012 at 1:56 pm
That’s fine if is part of your strategy to transfer in and withdraw funds to mitigate the exposure on the trading account. However, I rather not having the risk of a margin call. I’ve seen spikes in all markets, including the futures one that if you are over leveraged in your position, your account will be shut. But I will take in consideration that each person is different and the approach to the market should fit each one’s risk profile. Thanks for your answer!
Marcello September 27, 2012 at 3:48 pm
My pleasure Jose… each person has their own way of trading as long as it is working that is the only thing that matters. In any typical situation correct stops and risk management will mitigate a margin call. We travel quite a bit and choose to enjoy life so we often have internet issues which is why we trade the way we do.
samir September 28, 2012 at 5:43 pm
one question I had is when you teach what to look for in a good setup, what if only the coach can see it and not the person trying to learn in. I had that issue with a course I took. All the practice in the world, I couldn’t see what my teacher was seeing so I had to give up on that style of trading. thanks
Marcello September 29, 2012 at 9:46 am
Then you have a very bad coach Samir… I always teach all my students the rules for all of our setups and I am now starting to create a pros section to talk about the more advanced and pros setups for those are doing quite well. I honestly didn’t expect so many people to do so well sewn on creating the pros section so those that are doing very well with the strategy could get even better
Sewerin Jorgensen November 8, 2012 at 5:18 pm
Hello
I am a 44 year old partly-german-partly-danish male who have tried to trade – but without luck so far (the opposite I would rather say).
I have no intentions of giving up – I have just recognised the need of getting someone more experienced and successfull to teach me. I am in doubt of my potential – but I am willing to give it a try.
I live and work in both countries in combination. Being raised in a real-estate-possesing family I have experienced the journey from 2-digits balance-growth in the real estate bubble to (more than) inverse in the later years. Current balance is barely positive – but positive.
On behalf of my children – 2 lovely daughters at 4 and 8 years respectively – I am seriously considering realising/selling the reamaining real estate while time is.
Unfortunately our central-european leaders are more focused on being popular as easy it goes rather than solving the ever growing structural problems. Printing money through public debt is communicated as the cure to any problem – which it is not.
I must face that it may turn relevant for my daughters to create/have their future outside Europe – maybe in some of the emerging countries. Therefore I must prepare for this – without actually taking the decision for them. One promising approach would be to exchange our few remaing assets to something more movable. And if I could regain some of the mental energy by doing trades that goes well more than half the times – that would be a win-win.
On a regular basis I meet with other real-estate (once-was) investors. Too many of them have lost almost everything and turned paralyzed in the process. They feel old an worn out. But these days selling is hard – especially now that (real) market-value often is lower than debt. So they force themselves to keep on.
I have thought it through and asked for input from others. And to be honest – I cannot argue for things turning better in a reasonable time frame.
Therefore I desire to change ship before the current gets too close to water level (and eventual down) – and me an my family with it.
Sorry – a too long story. And forgive my amateur-english. The conclusion: I am very interested and motivated in becoming a better trader.
And you seem like a person able to learn me a thing or two.
Best wishes – including your relocation from Brazil to India q;.)
ayex January 18, 2013 at 5:01 am
Hey,
used to be in the same situation. There was some unexpected power outage and the whole neighbourhood went dark.I actually came up with a huge winner. But, I was without internet for about an hour and a half and I didn’t know what was the status of my position. Wasn’t using stop on the position, because I was managing it closely. However the good thing was that it was the late of NY session (was doing forex) and there wasn’t very much volatility and news.