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Hello Traders:

I want to share a couple thoughts on the implosion of the broker PFG and how it‘s demise relates to us as traders, our trade plans, and overall personal response to large financial loss.
First of all I was a PFG client and all of my monies for trading the FOREX market were there. I along with thousands of other traders (many in our small group here; part of the Triple Threat Trading community) were rocked by the news coming out late Monday afternoon when it was announced that PFG’s CEO had attempted suicide and the company s assets had been frozen by the governmental regulating bodies associated with and tasked to watch over the futures /commodities markets and trading firms. After a few phone conversations I was told that there were large financial irregularities (missing 200 million dollars) and that while there is a slight chance of my monies being returned to me the most probable outcome is that I have lost everything. 
Now, keeping in mind that the goal of becoming a professional trader and the financial freedom I had been working towards, The capital I had worked so hard to acquire in order to open an account, all the hard lessons learned along the way, all the personal beliefs I had to overcome and install a new, all the accounts ups and downs as I “finally” grew into a consistently profitable trader, everything had been washed away as surly as the footprints along a sandy beach at high tide. Except one, only one thing remained intact. That is the sure and certain knowledge I now possess (thanks to Triple Threat Trading tremendous mentoring) on knowing how to trade successfully and consistently. Nothing can ever take that away from me or any of the others here who have invested in themselves by learning the Skill of trading.

I know for certain that many clients of PFG upon learning they had been defrauded were instantly on phone screaming a yelling, probably pleading with the other party to somehow make the exception for them in order to retrieve their monies in their accounts. Now, I am not suggesting that I wasn’t angry or any of the other host of emotions that well up in us when an unexpected loss occurs.  Fortunately I have come to understand that we each have the ability to make instantaneous decisions on how we react to each and every event we encounter, even the unexpected. Be it a 200 pips loss or the complete disappearance of your trading capital it’s up to each of us to decide how we respond. I didn’t go off the deep end emotionally blaming everyone, kicking the dog, or yelling at my wife. I took responsibility. After all when it’s all said and done it was me who wired my own money to them in good faith.  

Perhaps I found a little solace in the fact that I had done my due diligence by investigating PFG, looking at what the regulatory bodies had to say, how many violations they had etc. Just as with every trading strategy I investigate it by back/forward testing before committing my capital. Only then would I go live and so it was with me and PFG. All the reports I read gave me a good degree of comfort in knowing they apparently were a solid firm with a good reputation.

What it boils down to is that even if you do EVERYTHING right you can still lose. This is true in your daily trading business, relationships, and in life. Sometime we do everything correctly and still receive what we didn’t want, expect or even deserve. We do our best to plan for every contingency but still the unexpected occurs. When these things happen we aren’t expected to like it, but part of what defines us as professional traders is how we choose to react to them and what the levelheaded, sometimes difficult decisions that need to be made in the aftermath.  

  As for me I choose not to moan and groan over my loss. I will continue to get up every morning at the same time and go to my charts and trade. Granted it now in a new sim account but I will continue to perfect my craft and work diligently at finding additional income so as to fund a new trading account. I choose to look forward not back. I picture myself as a rather charred and crispy Phoenix, but still a Phoenix rising from the ashes none the less. I choose not to count the number of time life knocks me down, only the times I get back up! I will never, ever, ever give up on my dreams.

Ted Stieghorst

 


 
 

The last couple of weeks has been a real mental challenge for me. About a month ago, my employer informed me along with others that our position was disappearing, and we would have to fight for the new position they were creating. They called it a management restructuring. I didn't see the odds in my favour since there was only going to be about eleven jobs, for at least fifty-five candidates, minus the ones that would simply up and quit.

Nevertheless, I felt that my best option was to step down, take a part time position, and trade part time to balance out my finances. I can honestly say if I never took the Protrader course, I would be at a loss, and would be like so many others, wondering what they were going to do after their Apr 2013 deadline, many in which would be out of jobs. I didn't want to be in their position, so I took a position, that I would always be in front of my computer by 8am, and planned to be a day trader. Begining next month, I will at least be a part time professional trader.

As I stated earlier, these last couple of weeks have been a real mental challenge. As the time gets closer and closer, I begin to realize more and more that my trading style must change. For starters, trading with a full time job, there was a sense that I didn't pay or give the correct focus on the market, or my trading. I have even noticed that I've made more mistakes - or maybe - because, it's the first time that I've been recording my trades (and yes, I have a man's diary too, Akil. At least now I do). The most recurring theme has been "Am I trading enough", "Will I get enough trades" If I have learned anything this week, A Journal is NECESSARY. The above questions would have been answered, and if there is anyone reading this not writing one, I hope you don't learn it the way I did. You need one. I'm also so amazed by the number of mistakes I've noticed while I have been writing it. It has assuredly opened my eyes.

As for the number of trades, well I have an edge, and my edge is a probability, and it makes sense that there will be times when it might not be there, and those times I must be out, and when it's present, I must be all in for it to work.

Lastly, (sorry to be so long), this new change, I realize has pushed me out of my comfort zone, and has made me a little nervous. But I also realize, if I'm going to succeed in this, I must step out and take the risk. This is the only way one grows in anything.
 
 

My ‘horror story’ happened about a year ago. Back then I was a day trading machine, it was how I made my living at the time. I ran 4 monitors on two systems in my office, and another set up on the kitchen counter just for when I was getting coffee. 16 pairs on multiple time frames, and swinging for the fences with every trade, 20 pips a day is all I needed and usually got. That is, until that one day.

In hindsight I now realize I was biting off way more than I could chew. Trying to trade too many pairs, on too many time frames was a recipe for disaster. I really thought I had my bases covered, I followed my rules, kept great records, used money management, and usually used ‘good till end of day entries’ just to be safe. But the problem had always been there, a lack of discipline; being too aggressive and too greedy with a dash of over confidence and a hint of lazy. 

I don’t remember the exact pattern I set the limit order for, something on the 5 min chart, but it was my full contract size, 3 standard lots, 2 for targets and the third as a runner to trail stop. ‘Set it and forget it,’ I did this often, if it triggered great, otherwise I would cancel it later, and hurry off to the next chart. Thing is, this time I forgot to cancel it, and it was not a ‘good till end of day’ order. There it sat, a buy order with NO protective stop, hiding amongst a sea of charts. A full contract, I had forgotten about it and I had gone to bed.

Didn’t make it up for the start of the London session, slept in, I was tired. Then the phone rang, a bit early for a call, a friend of mine on the other end, “did you see what happened?”, “no, what?”, “turn on the TV..”
It was March 11th, and Japan was just hit by an earthquake and a tsunami. I watched in disbelief for a couple of minutes, and then it hit me like a ton of bricks….Holy $#*t…my Dollar/Yen trade…

All things considered it could have been worse, down 125 pips when I finally got out, you do the math. Yes, it was a brutal hit to a rather feeble account size, and Yes, it hurt. But in the days that followed, and as I watched the news coverage, I came to the realization that I was actually pretty fortunate, my loss was only money. I am still here, my family is still here, my home is still here. I couldn’t say the same for the soles I watched on the tv screen.

I do things a lot different these days, I learned my lesson from that, and have since rebuilt my account, something Japan has only just begun. I learned another thing, that trading isn’t everything for me, it’s not my life, it is only a means to live. Never forget how fortunate you really are. Take care traders.

~Roy 
 
 
Hey Akil, there was a good example of why to close daytrades on a Friday evening. I took the AUDUSD 60 min trade we have been talking about in the room on Friday. The market went down, showed a 38.2 treracement, went sidewards in a range and I sold the breakout of the range. A few minutes before closing the market it reached my T1 which was +58 pips. I then moved stops to break even. Sunday evening on markets opening I got stopped out with the second position at -68 pips because of  the over-weekend-gap .... So this overnight gap tuned a 58 pip winner on t1 to a losing trade overall ... This is another point to change my trading plan. Maybe this would be interesting for the people in the room or on your blog ... Feel free to share if you also find this story helpful for others ...