Six Steps To Blow Up Your Forex Account

There are a lot of traders out there that have totally blown up their accounts.  I'm one of them.  Unfortunately, I never really knew how quickly this could happen until I actually did it.  Here's a brief synopsis of the events:

1. I'm trading normally, with what I think is sound money management, slowly trying to build on my capital.
2. Win 1, loss 1; win 1, lose 2; win 3 lose 1; win 1 lose 3; this can go on for quite some time.
3. Then a consecutive losing streak happens, 3 in a row, 5 in a row, 10 in a row, who's counting.
4. Emotion get the best of me, I start over-leveraging to try to get back what I've lost.
5. Things get worse and my balance is low.  Let me ride the rest on this 1 trade.  I can make it back. 
6. Kaboom! Margin call.

The last 4 steps can happen so quickly that before you know it, you've totally blown up your account.  Fortunately, I've come back from this smarter.  Instead of a blood gusher, I'm a slow bleeder.  Colin over at Forex Spirit had a rough December.  His 2007 equity graph alone shows how rough.  Check it out, you may learn something.  I think it was an important step for him to actually throw it all out in the open and write about it. 

What to read more about REALLY blowing up your account?

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