Wednesday, September 10, 2008

4 September 2008 -- Black Swan upon me -- 55k USD loss

it was Sept 4, 2008 when i was struck by the Black Swan event.

I lost all my trading stake of 55 000 USD in blink of an eye on a 'sure trade'

the event: I longed eurusd & gbpusd at the session lows after they had both descented 200+ pips so I felt pretty sure I would get a little profit riding the quick retracement

needless to say I was stupid enough not to use stops!!!

for a minute the prices backed down so I loaded more to a 1 mio per both positions - then once they reached breakeven they both stalled -- then I thought 'they are pretty weak maybe I'd better sqaure here and wait and see'

well I didn't square - instead they started free-falling and I kept buying until I had 5 mio Long GBPUSD and 3 mio long EURUSD and then they just kept falling until the dayly range extended to the surprizing 300+ pips in both...

pretty unusual event -- but that doesn't excuse my mistake not to manage my risk thru stops!

well what can I say - just as I fel sure in myself and I thought I had a basic system to trade I lost it all - now again I have to start from a scratch

in the last 6-7 months I turned 10k stake into 57k and it would be even greater since I drew on the account around 21k...
nominal return was 550%
well man, next time please do it better!

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