How they lost their account !!!

[TraderRavi]

Sorry for making this crazy title
recently came to know few crude oil traders in US , they lost their account (around $ 10000) while shorting crude oil last week and it moved up from $ 44 to $ 48. actually they added contracts on rise and lost the account and crude oil is back to $ 44.
felt bad and tried to google about crude oil contracts/margin in Fx brokers.

1) some trade in nymex crude oil future WTI ,
1 lot is of 1000 BBL , and margin money is $ 4600 , so if crude rises 1$ you are gaining/losing $ 1000 per contract.
with $ 10000 you can buy maximum 2 contracts.

2) some trade in crude oil CFD
there are various brokers where you can trade with oil CFD , where lot size is less and margin is also low,
I donot know what is standard lot size in these and what is the margin per lot and how much you gain with 1$ movement in crude.

3) some trade in ETF , dont know much about these crude oil ETF etc.

hope you will shed more light on this topic.

 

[Smart_trade]

Sorry for making this crazy title
recently came to know few crude oil traders in US , they lost their account (around $ 10000) while shorting crude oil last week and it moved up from $ 44 to $ 48. actually they added contracts on rise and lost the account and crude oil is back to $ 44.
felt bad and tried to google about crude oil contracts/margin in Fx brokers.

1) some trade in nymex crude oil future WTI ,
1 lot is of 1000 BBL , and margin money is $ 4600 , so if crude rises 1$ you are gaining/losing $ 1000 per contract.
with $ 10000 you can buy maximum 2 contracts.

2) some trade in crude oil CFD
there are various brokers where you can trade with oil CFD , where lot size is less and margin is also low,
I donot know what is standard lot size in these and what is the margin per lot and how much you gain with 1$ movement in crude.

3) some trade in ETF , dont know much about these crude oil ETF etc.

hope you will shed more light on this topic.

This story repeats in every markets all the times,commodities,forex,stock or Index futures.Excessive leverage, no stoploss and worst is adding in a loosing positions are the worst mistakes for traders going burst in any market.With 10 % move in any market, very few leveraged traders can remain liquid. Off late I saw some traders bragging in our forum also that they dont keep stoplosses...my best wishes for them and their trading accounts.

Traders need to understand that NOBODY can consistantly predict /forecast the markets accurately all the time . Trends can reverse anytime and very violently and we must have ways of dealing with such happenings in our trading plan if we have to survive in the markets for long term.If we come to markets for fun and blow our accounts in 6 months and leave the market, then it is a different thing but most want to make a steady career here. Trading Career can never be made on uncontrolled speculation.

These incidences will keep happening in future too.

Smart_trade

 

[Dax Devil]

Sorry for making this crazy title
recently came to know few crude oil traders in US , they lost their account (around $ 10000) while shorting crude oil last week and it moved up from $ 44 to $ 48. actually they added contracts on rise and lost the account and crude oil is back to $ 44.
felt bad and tried to google about crude oil contracts/margin in Fx brokers.

1) some trade in nymex crude oil future WTI ,
1 lot is of 1000 BBL , and margin money is $ 4600 , so if crude rises 1$ you are gaining/losing $ 1000 per contract.
with $ 10000 you can buy maximum 2 contracts.

2) some trade in crude oil CFD
there are various brokers where you can trade with oil CFD , where lot size is less and margin is also low,
I donot know what is standard lot size in these and what is the margin per lot and how much you gain with 1$ movement in crude.

3) some trade in ETF , dont know much about these crude oil ETF etc.

hope you will shed more light on this topic.

Blinded by greed traders usually forget simple arithmatic of money management. I have seen on moneycontrol traders coming with a lakh or so and trading 2-3 mega crude lots at one go. Crazy, really, like russian roulette. They think of gains in terms of exposure/span margin and low brokerage, which is a illusion that benefits only tax people and brokers. The reality is they are trading EXCLUSIVELY with market money (leverage) but the total cost of 3 lots of crude is around 10 lakh. It doesn't matter whether they have SLs, because those SLs are illogical and are usually gunned down as they are margin-based SLs while the crude moves with full weight of its total price. The whole exercise eventually turns out to be fly-fishing in piss.

That is the reason I gave up stock trading. It is not the amount of money in the account, it is because nifty etc are out of sync with my moneymanagement due to inflated lot size with ugly moves.

 

[comm4300]

Sorry for making this crazy title
recently came to know few crude oil traders in US , they lost their account (around $ 10000) while shorting crude oil last week and it moved up from $ 44 to $ 48. actually they added contracts on rise and lost the account and crude oil is back to $ 44.
felt bad and tried to google about crude oil contracts/margin in Fx brokers.

1) some trade in nymex crude oil future WTI ,
1 lot is of 1000 BBL , and margin money is $ 4600 , so if crude rises 1$ you are gaining/losing $ 1000 per contract.
with $ 10000 you can buy maximum 2 contracts.

2) some trade in crude oil CFD
there are various brokers where you can trade with oil CFD , where lot size is less and margin is also low,
I donot know what is standard lot size in these and what is the margin per lot and how much you gain with 1$ movement in crude.

3) some trade in ETF , dont know much about these crude oil ETF etc.

hope you will shed more light on this topic.

Thank you Ravi. this is the story of probably 99.99% of people who come to this field.

one suggestion:
being a optimist, i'd also like to hear success stories, preferably local stories of how one's discipline and never give up attitude made some one successful.

 

[RiddhiPD]

In trading crude oil it is extremely easy to loose everything...even your underpants ....but in my small experience I found out i lost more money trading stocks and future than crude and Crude actually behaves in a far organised manner than Nifty future.

Every instrument has its own identity and movement behavior .A good trading commodity for "you" is that commodity which satisfies your own personal volatility appetite. Our instinct is individual,problem is we try to follow other's instincts and lose.

The next step is to identify the nature of the movement and making a prediction with a probability that there is 50% chance you will be proven wrong.Thats where stop loss comes into play.We are not only stopping our losses for this trade but over a long period of time Stop loss gives us a favourable probability to win.Thats why stop loss is important.it increases our odds over a long period of time.Simple mathematics.I took two years to understand it.Now even if my stop loss gets hit,I am okay and wait for the next trade.

The good things about Crude are
->mostly it behaves in a predictable manner when the news hits.
->It gives good setups in even lower time frame.
->when it picks up a trend you can ride it.

Bad thing about crude is sometimes algos hit the market hard and for few minutes price spikes and then journeys again the direction of the trend.But for few minutes it freaks you out.Thats where again a good stop loss strategy comes into play. Atleast you won't die from heart attack.

For me I am very simple trade.I am new.I look for simple trades.

When I tried to day trade Nifty future, my personal opinion, felt like it is very easy to disturb the market.Disturb in the sense that suddenly price drops 50 points for profit booking??? price can drop or move 20-30 points without any reason what so ever.A stock can move 5 points in NSE when someone gives 5000 buy order.For me personally I found out I can't explain or tolerate erratic behavior and I stay out of it.And stocks and futures are plugged with failed setups just because somebody decided to put a 10000 share buy/sell order at that moment.What I have found out crude I can predict setups more accurately in crude.So I trade it.Again its my personal experience.Yours may differ.

Actually i was told trading commodities is the sure fire way to loose all you money.So I kept out of it.But if you do understand price movement.disciplined and have patience it is actually very very hard to loose money in crude.

I am total n00b.I barely scratched the surface.But I don't understand how did the guys loose their money like that.
Right now if some one wants to start trading I will advise him to start with Crude for a simple reason.For 1 point movement in mini lot you loose 10 Rs.It is such a god send move for me that I cant express,especially since SEBI went increasing the lot size in Nifty and I am not going to enter it at this point of my career even if you hold a gun against my head.

I am happy trading Crude.My profit is laughably small,since its 1 mini lot.But they are regular.I have experimented and found out what works or what doesn't work.I am not trying to hit jack pot any more but small profit every day.But I trade with real money.And slowly after months of trading my nerves are getting a lot better.

Although I am very new but if somebody is thinking about trading crude,go ahead.Just don't be stupid.

 

[Dax Devil]

...

I am happy trading Crude.My profit is laughably small,since its 1 mini lot.But they are regular.I have experimented and found out what works or what doesn't work.I am not trying to hit jack pot any more but small profit every day.But I trade with real money.And slowly after months of trading my nerves are getting a lot better.

Although I am very new but if somebody is thinking about trading crude,go ahead.Just don't be stupid.

If you have experimented and found that trading profitably 1 mini lot is comfortable for your mental and financial health, then you are one hell of a good trader, my friend. Doesn't matter if you are noob or old hand, such discipline will make sure you have a bright future in trading. My best wishes.

 

[bpr]

Sorry for making this crazy title
recently came to know few crude oil traders in US , they lost their account (around $ 10000) while shorting crude oil last week and it moved up from $ 44 to $ 48. actually they added contracts on rise and lost the account and crude oil is back to $ 44.
felt bad and tried to google about crude oil contracts/margin in Fx brokers.

1) some trade in nymex crude oil future WTI ,
1 lot is of 1000 BBL , and margin money is $ 4600 , so if crude rises 1$ you are gaining/losing $ 1000 per contract.
with $ 10000 you can buy maximum 2 contracts.

2) some trade in crude oil CFD
there are various brokers where you can trade with oil CFD , where lot size is less and margin is also low,
I donot know what is standard lot size in these and what is the margin per lot and how much you gain with 1$ movement in crude.

3) some trade in ETF , dont know much about these crude oil ETF etc.

hope you will shed more light on this topic.

$4600 margin for holding overnight position.
For Intraday it is 10% roughly $500
But the thing is the market is 24/5. there is a day session and night session.
When the market transitions from day session to night session there is 30 min /1 hr gap ( not sure exact )
At that time if you want to hold the position then u need full margin.
Then again once night session starts u need intraday margin only.
So people who needs to hold over night just sell their position then buy back 1 hr later u never need full margin. generally market does not move much in that 1 hour period.

So $10000 guy can easily buy 10 lot with $5000 to spare and can get wiped out in no time ..

 

[TraderRavi]

$4600 margin for holding overnight position.
For Intraday it is 10% roughly $500
But the thing is the market is 24/5. there is a day session and night session.
When the market transitions from day session to night session there is 30 min /1 hr gap ( not sure exact )
At that time if you want to hold the position then u need full margin.
Then again once night session starts u need intraday margin only.
So people who needs to hold over night just sell their position then buy back 1 hr later u never need full margin. generally market does not move much in that 1 hour period.

So $10000 guy can easily buy 10 lot with $5000 to spare and can get wiped out in no time ..

$ 500 margin for 1 lot crude (1000 BBL) means a 50 cent cent move will wipe out the margin and crude intraday $ 2 moves are common , this type of margin is disaster for trader and brokerage firms both , I remember one friday few years back after a report/data release in US there was a $3 move in 2-3 seconds in crude. what will brokerage firm do to recover losses in such events.

 

[nitingosavi]

Traders need to understand that NOBODY can consistantly predict /forecast the markets accurately all the time . Trends can reverse anytime and very violently and we must have ways of dealing with such happenings in our trading plan if we have to survive in the markets for long term.

Smart_trade

This is the thing happens with me many times when trend reverses.. still unable to find exact way... but now somehow manage to deal with it.

before 6 yrs I have blown my a/c twice. 2009 when maket bottomed I was short.. I mean was having puts that time with whole of my capital that time 40-60 K. and before that once I lost whole capital in infy puts..

these two incidents taught me not to love own trade .
that was last incidents. after that I have never had a negative month. and never ever puts in 100% strength in one bull or bear side.

 

[bpr]

$4600 margin for holding overnight position.
For Intraday it is 10% roughly $500
But the thing is the market is 24/5. there is a day session and night session.
When the market transitions from day session to night session there is 30 min /1 hr gap ( not sure exact )
At that time if you want to hold the position then u need full margin.
Then again once night session starts u need intraday margin only.
So people who needs to hold over night just sell their position then buy back 1 hr later u never need full margin. generally market does not move much in that 1 hour period.

So $10000 guy can easily buy 10 lot with $5000 to spare and can get wiped out in no time ..

$ 500 margin for 1 lot crude (1000 BBL) means a 50 cent cent move will wipe out the margin and crude intraday $ 2 moves are common , this type of margin is disaster for trader and brokerage firms both , I remember one friday few years back after a report/data release in US there was a $3 move in 2-3 seconds in crude. what will brokerage firm do to recover losses in such events.

hey one correction The intraday margin for CL is $1000 not $500. The S&P mini index is $500.
Actually it can vary from broker to broker.

From what I understand nobody trades these markets without SL. not even for a second. The SL goes hand in hand with entry.
They have all kinds of order types/advanced platform easier for people to put trades along with SL/profit.