The Account Blowers Club
The account blowers club is an international establishment with members from all over the world. Members age varies from as early as 16-17 years old (sometimes maybe earlier) up to 70-80 years old (some even older). The club doesn’t care about sex, age, religion, race, skin color, height, weight, location or any other factor that distinguish us as humans. It however cares about your internet connection speed, monitor size and last but not least how comfortable your chair is.
There is not monthly membership BUT the members would regularly be pushed into depositing more money to their trading accounts. Most beginner traders join the AB Club at the beginning of their trading career and some are stuck there forever. A small group of them though finds a way to leave the club once and for all. If you want to leave the club, this article is for you!
Are you a member of the Account Blowers Club? I once was – for good or bad. You might find a few good tips on how to get the losing monkey off your back. BECAUSE trading is indeed one of the BEST jobs in the world one could have. It doesn’t matter if you speak english, german or finish, it doesn’t matter (much) in what time zone you live in, only sky is the limit of how much you will grow, you will have all the time you ever wanted to spend with your family and loved ones and 100 more reasons…BUT only if you are one of the winners.
So are you? Don’t feel bad if the answer is yes. Statistically most people are. A more important question is “How many times have you blown up your account before? “. Have you learned anything from your mistakes? What and why went wrong?
Every battle you lose must push you up the Success ladder. Every battle is a new step up – it should be. If it is not – you are just blowing up money! You might as well go to the casino or the horse track or a club or go to vacation. Spend the money but have more fun.
You must learn from your mistakes if you want to develop yourself as a trader. I make money consistently for years now and still I learn and grow and develop, one step at a time, every single day. When you reach your goals, set new ones, higher and tougher to accomplish. Leave the comfort zone as often as possible.
Next question I would like you to ask yourself is How many times have you said to yourself: “This time I will do it the right way” ?
No wonder my cousin’s wife thinks we are all gamblers (she is not into the business). When you have lost your money a few times and you tell your wife: “Honey, this time It will be different” it does sound like an addiction doesn’t it?
TRADING HAS NOTHING TO DO WITH GAMBLING
Traders take conscious, well planned and analyzed decisions about the future price of a given financial asset, relying strictly on statistics to make money – well the successful traders anyway. Trading is not about “ooo that looks bullish, let me buy some”. No! This is kindergarten approach.
My point is, if you have blown up 2-3 or more accounts it is better to stop for a second and think why does it happen. Obviously investing more, repeating the same mistakes will prove only one thing: history does repeat itself!
When you pinpoint your mistakes things will change. Be specific – I closed this trade earlier than I was supposed to. What is the result of this mistake? I win less than I was supposed to, messing up my risk:reward ratio, causing me to lose more than I win and in the long run I lose money rather than earn money. Next week when you do the analysis see if you have done the same mistake again throughout the list of trades you have executed.
If you haven’t – there you go, this is advancing! A trading journal is going to help you accomplish this task more than you can imagine. There are even samples and templates of trading journals which will make your life easier. To download one such template click here.
Blowing up your first account – a must, a necessity or a skip?
” Does it really have to be this way ” you might find yourself asking this question. If you are just starting and you have never invested before (real money) let me tell you right now – NO, it doesn’t have to be this way. Forget what people and forums say. Trading is all about the “self” and the “inner” – it is all about you. How much you will grow your account, how much you will make per month, aggressive/conservative trading, hours you want to work, goals you will set. Everything or at least huge part, depends on you.
Blowing up your first or the first few accounts is entirely up to you and how you will approach trading. The first thing you must realize is that trading and the money you will invest in it, is your business. Just like any other business you would start. The trading plan is in fact your Business Plan. Break down the process into simple, obvious and clear steps.
Next you must make sure you cover all possible scenarios for each step. Once you do that, practice – which helps train your psychology – and then practice more – demo first of all. ONLY when you have done all that and you have proved yourself that you are making consistent profits for a period longer than a few months ( you want to see how you will perform in different situations), only then you should move forward to live account (real money). Start small, so you don’t care about the money but it would be more of an educational, psychological training kind of trading.
If you are profitable again, bravo! You are almost there. Start increasing the amount of your capital slowly and respectively the volumes you are trading with. If you jump from 0.03 lots to 30 lots, it won’t end well. Believe me.
This is how a well prepared trader may skip joining the Account Blowers Club. Of course there will be questions and situations that your trading plan is not ready to answer but 99% of them will be covered. The rest will come with more learning and experience.
Anything is possible if you are willing to work hard for it.
How to recognize the members of Account Blowers Club?
It has always been funny to me, yet strange how some people claim things that are obviously not true. Showing yesterday’s winning trades in a forum doesn’t make you the bigger man. It actually makes you the smallest trader out there. Trading is not and shouldn’t be about bragging. There is no single trader in the world that makes no mistakes and has a performance record of 100% winners.
This is insane and stupid. Yet people are doing it. Another very common situation is when traders use huge leverage on very small accounts. This is a disaster. Sooner or later you run out of luck and the “winning” trade that will blow off your account will come. Money and risk management are two of the pillars on which successful trading is built on.
There is no long term successful trading without money and risk management.
Worst part is these members of the AB club are easily recognizable but they influence the new traders in a very very bad way. Showing outstanding and unrealistic returns triggers the greed switch in most of us, wanting to accomplish at least the same or even better results and we end up with nothing. The oldest lesson in the book. Believe me guys – if it looks too good to be true it most likely isn’t.
How to cancel your Account Blowers Club membership?
This issue might have multiple solutions and if there are people who have managed to do it successfully please do share your opinion in the comment section so we can help other traders around the world !! Thank you in advance!
To me the solution looks like this. Feel free to shape it and tweak it however you find as long as it works out.
It all lays in the source of the issues. Start carrying about each trade as if it was the last trade in your career. Do your analysis as per your trading plan. Set the stops and targets and eventually the entry if it is a pending rather than market order. It won’t take much, trust me, only after 20-40 trades it will pretty much become your second nature to go through the screening process without even thinking – autopilot. Do everything as you have described it but most important is to keep a trading journal.
I’m sure the trading journal will help you specify the exact issues in your trading only after 15-30 trades.
Next extremely important subject is to focus on Risk versus the Reward. How much does your strategy give you per trade? You must find a strategy/system/method where the risk:reward ratio is at least 1:2. At least! You must aim to earn at least $2 for every $1 you risk. This is called edge. As said above we are not gamblers, we are traders.
Next on the list is having the skill NOT to lose. This skill you must acquire before you actually learn to make money from trading. Why you might ask? Because my dear reader, it is much much important to not lose money than actually making money. If you make $100 per day on average but you lose $200 per day on average where does that leave you, even though you know how to make $100 per day?
When you start making money you must know how to keep them. This is as equally important and hard to learn as making cash.
In here we can add the ability to minimize losses. This one falls into the a bit more advanced techniques but once you get ahead of it, it is quiet simple. If you have 100 trades, from which 50 are winners and 50 are losers BUT the losers on average are smaller than the average winner you will still make money.
Even if you already have a strategy where you risk $1 for potential profit of $2 there is a way to improve the statistics. One way to do so is to cut the trade earlier when you see there is an opposite divergence against you. For example you go long in EURUSD, with 50 pips stop loss and 100 pips target. Say that the price is currently at -20 pips (floating PnL – meaning that the trade is still running but it is in the negative at the moment) and there is bearish divergence that completes itself with the close of the current bar. What does that tell you? There is bearish pressure on this time frame and it is very likely that the pair might go south, even if temporarily. You are only 30 pips away from the stop loss. Here comes the trading decision which you must take. Cut the trade at -20 pips or let it run as in your original plan and risk to hit -50 pips.
When you become an experienced trader you will know when the divergence (as in this example) counts when it doesn’t. The point is, there are ways to cut the losses even further which will tremendously improve your risk:reward ration in the longer run.
Another way to minimize the loss is to move your stop loss to break even after price has moved in your direction. The tricky part here is to move the stop loss at the right time, leaving the trade enough room to work. As you know the market is rarely going in one direction only. Most time we would see swings or waves or legs – up down, up down etc..
That would be all! I hope I have made some good points for you to think about and leave the AB Club as soon as possible. Looking forward to hear your opinion on the subject.
Yours,
Vladimir
