Thursday, January 24, 2008

Withdrawing funds


Lets review and summarize the 1,000's of comments I've been reading all over the internet-

-Your a gambler
-Your an idiot
-You need to quit
-You should have never held over the weekend
-Everyone new they were going to do a surprise interest rate cut
-You should have expected YM to go limit offer down -650 pts
-You should have diversified
-I've made the same mistakes
-30k isn't even that much money
-I know some people that have lost even more
-You should get a real job
-Where's your stop
-I hope you bounce back

The list goes on,,,

Position sizing has always been my problem. A recent commenter said the 1k swings are to big for me to handle emotionally, and he is right. I was at all time highs in my account last week after having a personal best day of making over 10k in a day. And then I took a gamble trade over the weekend and a blackswan event occurred and I lost almost everything. How can you come back and trade? You didn't learn your lesson in just a day? Your still trading too much leverage?

I've read the comments and I realize my mistakes. The only way for me to recover is to take action and start correcting my problems. As much as I hate it, I'm withdrawing more than half of what I have left in my account today. I feel like I will be handicapping my trading ability doing so, but it is the only way I will learn. By doing so, I will have reduced my leverage available, and my P/L swings will be much smaller. There is a much higher probability of me losing my whole account as it gets smaller, but I was able to turn 7k into 40k in 6 months last year, so I do have a chance at making money with a small account.

I could make more videos of me blowing up my account, but the couple dollars in ad revenue isn't worth losing thousands of dollars and being laughed at by hundreds of thousands of people on the internet.

Thank you for visiting.

34 comments:

Anonymous said...

Just so you know, our trading desk on Sunday made sure the market looked like a buy for a short term, got all you suckers in, and then jammed it down your throat. dude, don't quit!! We made soo much money this week that we need all the easy money we can get. You're trying to beat us part-time!!!!???? HAHAHHAHAHAHAH. Impossible. When you're ready to get crushed again, let us know and we will make sure we are on the other side, move the market to your stop, then I can get a little bigger yacht. Thanks again for your money. Just think what you could do with 30k, that is like losing 1000 a day for 30 days....30k. Car, down payment on a house, etc.....Well, we win, again. Thanks for playing.

Anonymous said...

Computer System for trading - $4,000
Placing a weekend futures bet - $30,000.00
Becoming an internet Celebrity - priceless

Seriously - it's not about ad revenue, screw that - it's about taking advantage of your internet celebrity. Some people would pay 30k to get the kind of exposure you had.

When you make your come back, it will be a great story.

Anonymous said...

You have to pay taxes on last years gains anyway so that withdrawal is necessary

Anonymous said...

Dude, what you did is NOTHING.

Look what i did.....oh man

http://www.nytimes.com/2008/01/25/business/worldbusiness/25bank-web.html?hp

Brett Steenbarger, Ph.D. on 4:36 PM said...

Well, HPT, your posts on the blowup are a bit like a Rorschach test: you can tell a lot about a person's personality by what they see and how they respond to what you've posted. Whatevs. Your willingness to take the hard look in the mirror will pay off.

You're taking *exactly* the right step. Get smaller and work on consistency. It's not about absolute returns only; it's about achieving consistent *risk-adjusted* returns. Many daytraders don't understand that: it's how much profit you make per unit of risk that is key. Once you have the good risk-adjusted returns, *then*, gradually, you boost your size and take advantage of your edge.

The great thing about getting smaller is that it makes P/L more psychologically manageable, so that you can focus on all those mechanics: execution, sizing, honoring profit targets and stop losses, etc. So often, traders lose their consistency because their size has created a magnifying glass on their emotions, skewing their decision-making.

My best wishes are with you. If you develop and work a comeback plan, you will be stronger--personally and professionally--for the effort. And that, too, will be worth posting to the Web.

Brett

Anonymous said...

Hey ..look up about the rogue trader. Might be a cause of why the market went so south during the weekend. :(

Anonymous said...

Good for you HPT. It's a smart move to lower your account so you can't trade more contracts. Now don't blow it. When you get back up to 15000, take the same amount of money out of that account again. Do not increase size until you have doubled your account, and then only increase it by 1 contract. Good luck.

HolyGrail

Anonymous said...

brett,

i really liked your first book, only one i read. You seem like a nice guy and possible philanthropist; therefore, can you help out HPT and a few of us other traders with a signed copy of your newest book? thanks, great to see you post.

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Glenn on 5:23 PM said...

Like the new blog look, old look sucked but did not want to say anything, ha.

West Coast Trader on 5:24 PM said...

read the response I posted to your previous post. Take it all out, keep the feed open, use your future charts to get you into stocks etfs. Then, educate yourself about mechanical systems for futures and do not trade futures until you can automate it. You will blast through what is left of your futures account because you will treat it as expendable knowing that you took 1/2 out. It's a mind fuck that will not work. I know.

jeff on 5:38 PM said...

fwiw, I think you are doing the right thing. Good luck!
/jeff

Dinosaur Trader on 5:38 PM said...

HPT,

Man, Dr. Brett showed up on your blog... that can only mean you must be really screwed.

He's right though... of course.

-DT

sage08 on 5:48 PM said...

Reduce your size and work up a million dollar ten year plan. That's what i did. You can check up the spreadsheet on my blog. It's a big picture longterm roadmap so that you need not feel pressured to get it all back at once.

P/S:- forget abt hitting 5-10k profit day. just aim for consistency.

Anonymous said...

HPT,

you should do more daily video's just about like what your learning, how it's going like yesterdays about being over leveraged. This whole things very educational and I beleive has helped alot of people reconsider their position size and leverage.

Anonymous said...

withdrawing money is the right thing to do I will go even one step futher; spend some of it. The reason your mind need to learn that you need to make more money to spend it. If you just keep money in your account to trade then what is the point.

MWF said...

that's a smart move

Anonymous said...

why are u even still talking about what happened on last sunday or monday?
It happened, u learned, move on, and lets continue to play.
cmon,u get paid by being a market player. ur hand was good but other guy had better hand and also bigger bankroll. it happens.
lets move on.

leon t on 7:44 PM said...

back in the year 2000. i had 1000 shares of a company called rmbs. i'm sure you know the name. to make a long story short rmbs went from my entry of $50 to $450+. and i held on. the letter who had reccomended it saw it going to $500it did not, it went to three after the market fell in 2000-01. and i held on. aside from that co i had access to 1 million margin so i had options on several other companies all with the house's money.or so i thought. i don't need to tell you that it ended badly. from millionaire to $2000. and even that could have been lost if i had not shut down the account. even my broker was following me.
i promised myself i would get it all back and more. and to do it well i've stayed out of markets for years. but i have not given up.
neither should you. by the way, i tried daytrading and i paid a lot of tuition for very little knowledge. even from market gurus

you seem to have developed a system on your own. that's half the battle. the other one is with yourself, it can be won.
will write.

Anonymous said...

You have huge balls to post that video of that loss - HUGE. All of the criticism you are getting is sad. Yeah, you messed up. You learned. A costly mistake. But I want you to know how much I appreciate you sharing it with the regular readers. I've been watching since about a year ago. I even quite my day job a year ago and hosted my own 'blog', but quite after a loss of 18k in an hour (same thing - holding overnight). Granted, I earned quite a bit in profit from similar trade-types, but the agony and stress of losing 5 figures in minutes is painful. So I re-entered the workforce and simply trend-trade. Again, thank you and screw the childish feedback you are getting. You've got huge balls. Go for it. We're all cheering you on. dave

Anonymous said...

Well we find out you do have some brains. Now only if your buddy Dehtrader would figure that out.

I lost $2k trading futures in a couple of months and decided to go back to simulated trading. And that was less than 1% of my trading capital. Only after I've got 1 month of postive gains will I go back to real $.

If you can't make $ paper trading you can't make $ with real. Likewise, if you can't make $ with 1 contract you can't make money with 10.

I'm bumbed I won't see another blow up video though.

Anonymous said...

You are an icon in my office. We are rooting for you to leverage your account and pull all stops.

StockRake on 9:27 PM said...

Anyone that has never had an account blowup hasn't paid the price for education yet or has just been lucky. You just paid your dues dude. If you're still interested in this game you will come back stronger and smarter. We all do.

Anonymous said...

leon t, I think I know the letter you was following, Cabot something. I held on to Presstek just like you held on to RMBS all the way then all the way down. One of the reason that I have not touch any stock ever since, it's still so painful.

future zombie said...

I've got a bad feeling about tomorrow. I'm guessing there will be a lot of selling before the weekend. Warning: Not investment advice.

Anonymous said...

not only that you were long when this bank was selling
"The bank said that the trader — who Mr. Noyer, the central bank governor, said “breached five levels of controls” and was “a computer genius” — continued the fraud until this past weekend. That is when auditors in the risk-management office detected fictitious trades involving European stock index futures.

When the fraud was unveiled, Mr. Bouton said, it was “imperative that the enormous position that he had built, and hidden, be closed out as rapidly as possible.”

The timing could hardly have been worse. Société Générale was forced to begin unwinding the trades on Monday “under conditions of extreme market volatility,” Mr. Bouton said
"

Trading Goddess on 10:56 PM said...

My dear friend,

You recall my recent calamity? Well, we both are starting over, albeit I have about a month's head start on you.

The sun is still on the horizon... and we will feel the warmth again.

Let's walk on Wall Street.

Hugs (and more!) to you! xo

Oli on 11:24 PM said...

Hi HPT ...

I trade since 1982 and everybody has ups and downs. Step back from the market some days, to clear your mind.
Then start working on your strategy including strict risk control. Set profit targets. If you reach them, walk away from the screen. If you win money on any day, don't ever let rinse more then 60% through your fingers. Stop trading for that day. Same, if you reach your daily stop loss, which should be NO MORE than your AVERAGE WIN, stop trading.
As I see, you are well connected, so seek advice and develop your own strategy.

YOU WILL BE SUCCESSFULL!!! And you can show the retards who laugh at you, who laughs last!

Take care and don't give up!

Cheers Oli

Anything-Goes on 12:41 AM said...

share your trading system with me and u would've done one great thing in life .. and am sure that will motivate u to do a lot more in the future. :)

Anonymous said...

Hi,
I'm Torsten from Germany. I can understand you very good because last monday, I had the same problem. Dow down 200 points in 5 sec and I was (very) long YM. Shit, but now, I have do recover ;-)

Sorry for your loss. From now I will visit your website and click some google ads ;-)

Perrush said...

Hi HTP,

first of all, let me say I found it very courageous of you to admit your massive mistake. A lot of us can learn from that. And let them laugh ... they just don't know better. I bet they've never been in a situation coming close to what you (and many of us) have experienced.

said that, I read that you turned 7k into 40k in 6 months.

For most of us this would be a 'waauwww' comment, but for me it tells me that you've taken trades which way too large positions for your portfolio. If you trade 'normally' you can't turn 7k into 40k within 120 trading days. Such a system MUST fail one day.

Why MUST it fail ??

It's a little to long to explain here. But try to search on the internet for 'position sizing' and 'von tharp' (you know : trade your way to financial freedom)

In the past there was a little program on the internet which simulated trading systems with different positions size systems. Long story short :

Regardless of how good your system is (winners vs losers) if you over size your trades things will go bad one they or the other. It's just a matter of time.

If you trade with proper positions, you can make money with even a much worse system.

Seriously, you should look for this little program it really eye opening to see how position sizing influence you outcome in the short and long way.

Greetz & Good Luck
Stefan

Anonymous said...

dr brett showing up is pretty bad. that's like dr phil showing up at the hospital to see britney. probably the only thing worse i could imagine is to see woodie show up here and say "this is what happens when you don't use the cci!" that's the cue to totally close the ib account, turn off the computer forever and ask for more hours at costco.

Anonymous said...

Your original YouTube video got taken down. Why? Did you request that? You should leave it up as a lesson. How many hits did that video eventually get?

Anonymous said...

the parody video is funny.

I wonder how they shifted down the octave of your grunt.

Reminds me of playing DOOM

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