Newbie made huge mistake - What should I do now?

Beginner Questions
1

Hello,
I am a newbie, if I can call me like this. I am studying since 1 year babypips and other books about forex. I opened me a demo account on etoro and I was trading succesfully - until I decided to open a real money account. My first trade and last trade: Selling Silver since yesterday.

It was a huge mistake, I am actually at -40% loss. I invested unfortunately a big sum of dollars…

Yes guys, please blame me after you maybe give me tips. I know, it was my fault…

What should I do know? Is it possible to close that trade in green?

I thank you so much trader!
Thank you!

2

As you can t force the price to move the way you want it, I only see two options:

  1. You can either close the trade now so that -40% doesn t become more
  2. You can pray for the price to go in your favor

I really don t follow the price of silver so I can t recommend any of the two options, it s your choice. After you finish with this trade, before anything else, study [U]risk management[/U]. I guess you overleveraged your trade and you traded much more that 1-2% of your total account, that is why you are loosing 40% in a day…

3

A good place to start studying risk management is this

4

Yes, you are right RogoPip. I have to learn more and more, and also risk management…

But for this situation, I don’t know if I should close or wait if it maybe fals a bit, so that I can close with a smaller loss?

I started selling @28.54 and actual it is 29.44… I am at -45% loss now. I am so frightened…

Has anyone a opinion, what to do?

Like RogoPip said, close or hold?

5

In this situation, there are only two option either close or hold. My suggestion is close to avoid more lose.

6

Ok, I’ll wait one hour and close then, thanks.

7

I havent been trading for long, and not huge amounts, but if you have another income, then I would just trade a tiny percentage. like 2 percent. And try milk your way back up over a long period of time, BE patient if you can, if you have another income, otherwise, try get a job, any job and maybe trade at night a few hours.
I wouldnt trade silver, rather follow a trend, like the Euro keeps falling, cause Europe in in trouble. So maybe trade the Euro to the Dollar. Thats just my opinion and suggestion, on what I would do.

8

Ok Thanks to you all for your tips. I think I will hold until -50% loss, and close then…

9

Well i hope you started with a small amount first off. Id say cut your losses. Learn risk management then start with a small shoe string account. It doesn’t take a lot of money to make alot due to compound interest. I suggest not risking more then 3% ever. .5to1% starting out till your comfortable live trading. The way you get into a risk free trade that makes small risks highly profitable is by taking half your position off when your in profit then move the other half Sl to Be. Then let the rest run or stop you out for a profit. Goodluck pip hunting. Dont get. Discouraged a lot of new traders blow up there first account withing first year of live trading

10

I know what i gonna say would be harsh … I think you must close that trade right away because you deserve that loss … After 1 year of studying and trading forex in demo account and you don’t have a proper risk management you deserve a loss … that what i think and again i know it is harsh but this is the truth.
What if the price have moved in your favor then you may just repeat that mistake again later or even with a larger risk … my advice take a loss and learn from it.

11

If anyone ‘knew’ how to trade your trade in the green, then they would be making a fortune on trading silver. They don’t so no-one has any idea about your trade.

Equally a lot of people here have blown accounts and don’t admit it, so you are asking the wrong place.

Basically the thing is you should never have let yourself get into this situation in the first place. You aren’t trading with a stop loss obviously, and anyone who trades without a stop loss will get blown up when the market changes phase (consolidation to ranging to trending up, or trending down). Note that most people who cry success shout from the rooftops and are silent after 1-2 months when market changes. Try trading with a stop loss next time - you will find that trading isn’t as ‘easy’ as other people say. Basically consider your drawdown as lost money. Its lost money - not paper losses etc - you have lost it.

12

If you are willing to close for a 50% loss you should close the trade immediately for a 45% loss.

It doesn’t make logical sense to wait.

13

That’s just planning to give 10% more to the market while planning that a miracle happens. If a trade goes bad, you need to close it. I would advise always having a Stop Loss in place to limit loss to a certain amount of your account (1% in my case, opinions vary but rarely advise more than 5% per trade), which then takes you out of a trade that has gone bad on you. You clearly did not do this, but you are still faced here with evidence that you read the market incorrectly and your trade has gone bad. Once you realize this, it is time to close the trade, whether you are 1% down, 40% down, 90% down, whatever. Always maintain an up to date view on whether any given trade still makes sense given the current market picture. If a trade suddenly makes no sense, trail your SL, cut your losses and close, whatever, but always be prepared to change your market view in an instant.

And obviously this point should come well before you hit anything like a 40% drawdown on a single trade, so you seriously need to stop live trading immediately until you have some form of risk management plan in place. If you can be 40% down on your account ([I]particularly [/I]on a single trade) then you should not be trading live as your system is fundamentally flawed and you will fail if you leave things as they are.

And the whole ‘I will close when I hit 50% down’ thing is crazy talk - that is chasing the market and using hope, rather than trading a strategy professionally. You’ll lose the rest of your account if you continue to trade in such an arbitrary, casual manner.

The secret to successful trading over the long term is mechanical execution of an effective strategy. If you can hit a 40% loss on an open trade then your strategy is not effective, and if you can even entertain the idea of holding until it hits a 50% loss just in case things reverse then you are not executing mechanically. So you need to address pretty much everything, imho.

I am sorry that this has been an expensive lesson, but it is a valuable one if it either a) makes you get a proper, rounded methodology in place or b) shows you that you are not cut out for this.

Trading as you are, think of taking the 40% loss as 60% saved rather than 40% lost - you could have blown the lot trading this way.

Hope you get back on the horse and come through this stronger for it.

ST

14

Close it right now. And slowly build it back with your remaining capital. All is not lost if you have some capital left.

Don’t wait anymore, doesn’t matter if price goes in your favor later because you would never know, all you know now is you are making a huge loss and it should stop right now before you become extinct.

15

Thanks. I closed with -45%, but silver fell, before it would hit my -50%…

Yes, its my fault, I have to learn.