Almost bust account any advice?

Beginner Questions
1

Hello everyone,

I am very new to forex trading and started off last month following a signal of signal start to see how it would go. I invested £7000 and a couple of weeks later I went from £12000 to £6000 in a day I closed the trades automatically before I was margin called, then down to £1000 (I have a £2000 bonus so it takes it up to £3000). this week also closing the trades again manually as I didn’t have the equity to keep them open. Now yesterday I was £900 up in my open trades thinking all was good I come home from work to see the gbpusd absolute flying up and I’m now at - £1700.

I’m wanting any advice on what I should do, I can’t just wait and see if gbp goes down tomorrow then next week. I thought I would see if any one has any expertise if I should just quit now or wait and see…

I know I have totally messed the account big time but it’s a big lesson learnt and one not taken lighten.

I have provided a screenshot of the trades open and my balance etc the bigger traders with the greatest losses are from last week when I still have £7000.

Many thanks, and be as brutal as you want to how I should handle the account.

Kristian

2

Ok … (but first of all, welcome to the forum!) … I think you should close the account and withdraw everything from it that you can, because what you’re doing isn’t trading at all - it’s just gambling, and with the odds very heavily against you.

It goes as you’ve experienced it. The speed at which that happens depends on your position-sizing. [I]Your[/I] position-sizing is hugely inappropriate. With a £7,000 account, an experienced trader [I]who’s very familiar with what s/he’s doing and has a proven edge[/I] (odds in his/her favour) would typically risk no more than £70 (1%) per trade, but you have a loss of nearly £300 in there, and several above £200.

I’ll explain, briefly, why “following signal services” doesn’t work …

There are thousands of signal services “out there” (and unfortunately quite a few of them “in here” as well!), and at any one time, out of those thousands, it follows that there will be a small number who happen, simply by the laws of chance, to have had a run of a few good months.

There’s also a process at work which statisticians call “selection bias”, which predicates that [I][U]those few are usually the ones you see advertising and promoting and being recommended most prominently[/U][/I].

Unfortunately, the fact that they happen just to have a few good months has very little (or “no”) bearing at all on their chances of having a good few months [B][U]again[/U][/B] when you subscribe, because they had it by luck and “because someone has to”, not by skill. They’re successful marketers, not successful traders.

And that’s the “hidden reason” why it’s so common to join a successful service and for it all to turn sour as soon as you start paying for it. :frowning:

Good luck, good wishes, and I just hope I haven’t offended you by taking your “be brutal” suggestion very literally! :8:

3

Thank you for the reply Lexy I really appreciate it.

I’m thinking if I close all the trades I won’t have anything to withdraw out of the account as my actual balance is only 930 and the trades are in excess of - 1700+ so would I end up owing them?

I also appreciate you being as brutal as possible I will take it into consideration indefinitely. One last question which I really can’t get my head around, I really can’t figure out when I would be margin called. Would you be able to shine any light on a price at this would be roughly?

4

You should be ok to close the account and I would very quickly your balance should be whats left after the loses. So if it were me I would cut my loses while you still can even if you end up owing a little money I would not compound the problem further. You will just lose more money

5

thats a lot of money burnt if you ask me, if its only been like a couple of months with forex trading in general, setting aside what broker you might be trading with here is what i would do in your shoes, 1st yeah get what ever money you have left and close the account for now, no sense in doubling the pain of losing… second retrace your steps and strategy, it could be you it could be the signal but all we know, its not generating the profit we are hoping for… you should be by now in a state where you think about all that lost money and how to get it back so DONT! let go of all loses to have a fresh start, a clear view of things to come, for the time being i suggest school of babypips for basics (yes its basic but we all need to go through it) and then open an account with a lot less than what you where trading with. if need to open an account with a mrer 200 pounds to play with, yes it makes things smaller but from here we do it the right way, give your self atleast 6 months of constant trading, get to your comfort zone, before you decide to jump with another big account, i started with 100usd when i first opened my hotforex account in 2011. its not that painful busting such an account trust me, been there a couple of times already… in 6 months time, you should have a clearer view of what needs to be done, avoid bonuses and such it just messes the trading in general. i wish to here more from you soon, and hopefully it would be better news. money comes and go, yeah regret is there and its not a small amount, but i highly suggest to let it go, the more you try to get it back has a higher probability of it just costing you more.

6

No, not if you haven’t yet had a margin call. You’ll be able to close all open positions and close the account, and there’ll still be something left in it, to withdraw.

7

The very 1st rule you need to learn is Money management

MM is more important than entry.

Never use signal services they are here today gone tomorrow. They often use small accounts and make more money getting paid as a signal provider than actually trading. They dont care about your trading account and even their own.

Never trade with leverage: So many traders trading with high leverage and just a few trades wrong and your account is gone. Keep leverage to a minimum. max 1:5 .

1 standard lot per $100,000 = 1:1 5 lots per 100K is 1:5. If your account balance is 10K its means trade with between .1 and .5 lots max.

Trade inline with fundamentals and use technicals as entry point.

As for your trade. (at time of writing) USD Bulls are returning and also for gbp. The pound has found its post brexit bottom so my advice is buy on the dips. The pound may float down ward next week but no guarantees .

You have 2 choices cut you losses or hold on and pray.

Just remember for next time Money management is more important than entry.

Trading is not there for getting rich is there to make an income when you adopt this mind set you will start to have some progress. Forget the mentality of make a million out of 1000 if it happens it just pure luck.

regards

.

8

One other thing, go with a broker that will stop out (s/o) your positions before they go into a negative balance( negative balance protection), that being said even brokers with negative balance protection is not full proof but does give you some protection.

9

Like it!!! :slight_smile: Catchy and easy to remember - write it above your screen! :smiley: