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Out of context: Reply #62521
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- Beeswax3
Last year around this time I started a new company to focus on app development and custom Saas building.
I got a $50.000 loan from my bank for entrepreneurs and $40.000 from my dad.
Couple of months before this I had started discovering Forex markets. I had invested a little amount of money to see what it is. Also while in college I had worked as an intern at a stock exchange brokerage firm. So I knew a little about technical analysis of stocks markets etc...
I almost lost all the initial small investment but right before I hit the bottom I was able to save it and made a little profit about $1000. This up & down and adrenaline rush was really exciting. So I decided to put all the money that my dad gave me into Forex to invest more comfortably in small amounts. You know instead of keeping it at the bank I was going to keep it in this investment account.
I should also mention that the leverage of my account was 1:500. Which means for every 1 usd you invest, forex company actually puts in $500 on your behalf. And if you win, you win like you invested in that amount and if you lose, again you lose like you invested x500.
First day I made $2000 longing(buying) crude oil. At that time oil had fallen tp around $50 from 100s.
Second day I made around $5000. I was forecasting that oil was going to rebound from this level, and I was right.
For a while.
I decided to tell my wife what I've been doing when I gained over $10.000 in the 3rd or 4th day.
I was winning at a great percentage of my buy/sell orders. So I increased the stakes.
I began to gain over $60.000 a day.
It was unbelievable, money had lost it's reality, it was just a number in my account. I was getting richer everyday without much change in my life. I didn't know what to do with that money I won. I began to make lists of people that I want to help from relatives and friends. This was such an easy way to make money and I decided I will keep doing this from now on and run my company with that money by hiring some senior managers.
6 days after I deposited that $40.000, my account has reached $260.000. I was so proud of myself I told what I've been doing to my parents and my sister. My sister had gotten some money from my dad as well. She gave that to me to invest for her. I got her $50.000. My dad Also gave $20.000 for himself.
And the downfall of crude oil have started.
I really don't want to remember those sleepless nights and teeth grinding with stress or beginning to lose my temper even with the sligthest distraction while I was watching the markets.
Forex markets run 24 hours 6 days of the week.
While you are sleeping, a whole world can go upside down. So you can't sleep.I lost everything, the defeat was so heavy that it was unaccceptable.
So I withdrew some cash from my credit card and used some of the loan that I got for my company to cover my losses.
I was psychologically messed up, so I kept making wrong decisions in narrow timeframes. All I could think was making the money back as soon as possible. Market now had become unpredictable and the prices were going up and down as well as my emotional state.
I lost again and again.
I don't remember any other time in my life, where death was preferable over life.
The self blame, the humiliation of defeat, the regret of decisions, the embarrassment in front of your family, loosing their money as well as their trust. On top of that, the physical decay of sleepless nights, the messed up psychology because of constant emotional roller coaster was unbearable.You might remember me from "Ask me I'm a muslim" thread.
My belief was the last safety net before my complete destruction.
I repeated every day believing in "God never closes one door without opening another".I decided to face the defeat and stop messing with this illusionary way of making money. I had skills and I had to use those to earn my life, step by step, slowly but surely.
But this wasn't easy, because it wasn't only my money that I had lost.
I reflected my current pyschological state to my mom, my supporter in any situation. She understood that I was really fragile around those times and gave incredible moral support by saying "life and well-being is more important than stupid money".
I already knew this but it's more effective when your mom says it.
My dad was like a classical dad but still understanding. He only said "What you did was very very stupid. You lost your sister's money."
I felt really bad for my sister. I didn't know what she was going to say. But she said that "I owe her 50.000" in a teasing way. Nothing worse.I decided to learn from this experience. It took me months to start sleeping comfortably.
If it came to my mind right when I went to bed, my body temperature would increase, I'd start sweating and couldn't sleep.
When I saw something that I need to buy, I'd remember that I could buy that if I haven't lost all that.
This went on for months but it's a lot better now.I landed couple of middle size clients that would help me to pay my bills and my rent. And I'm hoping, God-willing, to pay back my sister and my parents more than I owe.
And I learned that;
- Easy money comes with a burden.- Getting rich quick is like losing weight suddenly, your whole balance goes off. Rising up step by step is the healthiest way. It may be inheritence, or lottery, or some other lucky way, always be so careful with that money. It has destructive value with it.
- Once you get some sum of money, SPEND IT! I wish I had bought a car or furnitures for my house. That way I wouldn't be able to liquidate that money in such a short amount of time.
- Even if you have good intentions like I did, helping others, providing a better life for your family etc. it might not work. Maybe after I fulfilled those things I'd change into a different person that would reck my marriage. Digesting wealth is hard. Ego is waiting in the dark to glorify you and turn you into a dickhead.
- Financial markets are an illusion. You don't really create any value. If you win, someone has to lose, if you lose someone wins.
Traditional way of making money is a win win situation in most cases, you create some value for somebody and you get paid for it.- If you're into forex, screw leverages like 1:500. At some point my invested lot amount was equal to $80.000.000. who the hell I am to play with that amount of money?
- Don't ever think about ending your life. Things come and go. Your health and your beloved ones are the most important.
It's been one year since I'd gone through these and I'm still learning from those mistakes.
I'm now happy that I didn't keep winning and got back to my own way of earning my life.- you're blessed with a good family. hang in there.Gnash
- You studied markets? what was your method for trading? I did the same only lost once. but average $200 a day 1 trade a day. I stopped after made good on cable tyurimon
- prob 90% research and projections. I learned the methods of projecting if a stock is over sold. moving averages, stockastic, etc. psychology d biggest factor.yurimon
- took to much time looking for good deals. if i had mo $ to play prob been worth it.yurimon
- You're not really getting the moral of the story here, yuri ;)Gnash
- Moral is clear i wasnt focusing on that aspect.yurimon
- I tried hundreds of trading methods maybe. I also ran some expert advisors, followed every bit of news, copied other traders.Beeswax
- You're right, psychology and having the right mind set is the key. That needs to be mastered first. I like to take risks and that defeated me.Beeswax
- There also trends like. I knew banks were going down from heated housing market 2008. It was good to short bank stocks.yurimon
- right now you have alot of algorithms trading. not sure how to do short term trades. what worked for me is rsi. if stock is over bought.yurimon
- imagine a rubber band stretching and the resistance it gets if it has stretched to far. sometimes you have a breakthrough new highs or lows.yurimon
- we're an interesting species, humans. no matter what mistakes people before us have made, we just have to make them ourselves sometimes to really see whatSteveJobs
- it is we really value. good or bad as that may be, i'm glad you made it through that time and gained such valuable perspective. maybe someone here can learnSteveJobs
- from it as well before going down a similar path.SteveJobs