Ever Blown Your Trading Account?

[Pharaoh]

I think the problem is not using Stop Loss or not because using stop loss could cause loss many times if you don't set it in the right price so it can drain many dollars from your account. If stop loss can't limit loss effectively then traders can feel useless to use it. But if you can set Stop Loss in the strategy price then it can limit loss when you made mistake too. It can help traders to prevent big losses and prevent traders to blow up current account.

If you SL is always costing money, you need to examine your trading system and make some adjustments.

For example, if you are scalping a low-spread pair, a SL of 8 or 10 points could be very reasonable. If you are trading hourly charts and hoping to make 20-50 pips, a 10 point SL is likely to kill the bulk of your trades long before the reach TP.

The advantage of a SL (Swiss interventions, NFP surprises, and weekend gaps aside) is that they can limit the risk of each trade.

Saying "I'll monitor all my trades manually" doesn't work unless you are trading very short time frames. No one who leaves trades open 4 hours or more is very likely to not step away from the computer for even a moment. Additionally, if your internet connection drops just before the market turns against your positions, that SL will save you a lot of money.

Hard stops are one of the most critical pieces of risk management. The only possible exceptions in my book are super-low leverage long term trades and scalping with low leverage. Even with the scalping, I'd want a hard stop 20-30 pips out to cover me in case the internet went down.

 

[henyo]

blowing an account is pretty common I guess, like i started with a very small amount(not that small) and was relaying mostly on luck, now imagine watching the trade eating your capital like crazy while you pray for it to go the other way! well it did not! LOL but it was something that made me learn to be more cautious about intuition. baseless judgement it a killer!

 

[EURUSD]

If you SL is always costing money, you need to examine your trading system and make some adjustments.

For example, if you are scalping a low-spread pair, a SL of 8 or 10 points could be very reasonable. If you are trading hourly charts and hoping to make 20-50 pips, a 10 point SL is likely to kill the bulk of your trades long before the reach TP.

The advantage of a SL (Swiss interventions, NFP surprises, and weekend gaps aside) is that they can limit the risk of each trade.

Saying "I'll monitor all my trades manually" doesn't work unless you are trading very short time frames. No one who leaves trades open 4 hours or more is very likely to not step away from the computer for even a moment. Additionally, if your internet connection drops just before the market turns against your positions, that SL will save you a lot of money.

Hard stops are one of the most critical pieces of risk management. The only possible exceptions in my book are super-low leverage long term trades and scalping with low leverage. Even with the scalping, I'd want a hard stop 20-30 pips out to cover me in case the internet went down.

That's what I wanna to tell about, using stop loss can be effective if you can find out the best setting to place Stop Loss. There is no fixed rule about how to place Stop Loss correctly because it's depending on each trader's view. For scalpers, 10-20 pips in each transaction is realistic place for setting Stop Loss but it's too near for intraday trader.

Some traders could use risk reward ratio to place stop loss effectively but you must know the best time for entry position so Stop Loss won't be easily to reach either. Good place to set Stop Loss has close relationship with strategic place to set open position (or pending order) in every transaction.

 

[bigdolly]

That's what I wanna to tell about, using stop loss can be effective if you can find out the best setting to place Stop Loss. There is no fixed rule about how to place Stop Loss correctly because it's depending on each trader's view. For scalpers, 10-20 pips in each transaction is realistic place for setting Stop Loss but it's too near for intraday trader.

Some traders could use risk reward ratio to place stop loss effectively but you must know the best time for entry position so Stop Loss won't be easily to reach either. Good place to set Stop Loss has close relationship with strategic place to set open position (or pending order) in every transaction.

Can't get used to set stop loss on JPY and RUB pairs because of ten or hundreds pip movements.. Was hit SL several times because of setting 30-40 pips.. So forced to do that manually by eye.
Do you know any indie helping with that?

 

[nahiyar]

Stop loss save me many times to blow up my account I set it on some pips which I can easily bear to loose . I see market move against if not used Sl it can rapidly wash my account in seconds even I was watching my trades.

 

[WatanFX-Rep]

Not completely blown, but when I first made my entry into the stock markets back in 2004/2005, I lost $35k in one single trade. Had deposited $50k into a broker account. This was stock trading, and I worked on William O Niells CANSLIM strategy.

Thought it would change my life, little did I know that successful investing is a lot more than a $30 book read.

 

[joelmch]

This is the reason why I have many accounts on different brokers. So if it's blown, it will be blown on small pieces. So far, this has been working quite well for me.

 

[EURUSD]

Can't get used to set stop loss on JPY and RUB pairs because of ten or hundreds pip movements.. Was hit SL several times because of setting 30-40 pips.. So forced to do that manually by eye.
Do you know any indie helping with that?

I think it's depending on your timing for entry and exit point when you're using the pair. As I know, if you're using pair which has JPY currency then it is still possible to use Stop Loss. I think almost all pairs are moving hundreds pips every day, not only JPY pair or RUB pair. If you're using EUR/USD, its daily movement is around 150-200 pips daily (sometime it can be less than 100 pips). If you're using EUR/JPY, it could be more volatile than EUR/USD but it is still okay to trade with it. Why do you think that using JPY currency can't use Stop Loss?

 

[Whitesnake]

Recently it so happened to me that i scaled up the trading account from $50 to $200 and then finally i lost my control on account management rather i got greedy only to blow my account. Blowing the account makes us feel bad for sure.

 

[downtrend]

Recently it so happened to me that i scaled up the trading account from $50 to $200 and then finally i lost my control on account management rather i got greedy only to blow my account. Blowing the account makes us feel bad for sure.

Blowing any trading account feels very bad. Especially if you had profited for quite sometime. It only happens when you deviate from your trading plan like you said.