The Forex Washouts – Forex Horror Stories

During our years of involvement with Forex trading we have come across many other fellow traders that we have become acquainted with or just simply observed from a distance among various trading communities.

Some of these traders evolved into profitable full time traders, others unfortunately became another bad statistic. This article is going to tell the Forex horror stories of those traders who didn‘t make it. We can reflect on their mistakes and make sure we don’t repeat them.

These are true stories, so to respect the privacy of these people we will replace each trader with the appropriate Mr Men personalities.

Mr Greedy

Mr Greedy was a successful businessman, he started off like most people and got a good education so he could go off into the working world, get a good job and earn a comfortable income. Mr Greedy wanted more, so he used the money he earned through his career and started up his very own business. Mr Greedy worked hard to grow and expand his business to a point where he became a multi-millionaire.

Mr Greedy was set for life, his business was doing well and things couldnt be better. But Mr Greedy wanted more than his fair share, so he started looking for other ways to make even more money. Mr Greedy discovered Forex trading and discovered the sky was limit when it came to potential income. Because Mr Greedy was already a successful businessman, he was very overconfident in his ability to take on the markets and generate wealth beyond his wildest dreams.

Mr Greedy invested heavily in the markets and quickly discovered that he wasnt really getting the returns he was initially expecting. So Mr Greedy invested more money and traded more aggressively and started to notice his money disappearing even faster. Mr Greedy was not used to this kind of failure and in his frustration poured even more of his money into the markets and pursued even more aggressive trading tactics.

Then POOF! Mr Greedy lost all his invested money, but he wasn‘t finished yet. Mr Greedy sold off what was left of his businesses, got loans from the bank and went ’all in. With everything now on the line Mr Greedy was an emotional time bomb, his third attempt at making money from the Forex market bankrupted him.

Mr Greedy is now a shelf packer at the local supermarket struggling to pay off his over bearing debts.

The lesson: Mr Greedy thought he could apply what he had learned in the real world into the Forex market place, this is far from true. As we often point out, the lessons you learn from your everyday life don‘t work well in the markets. Things like ’the harder I work the more I will make.

Mr Greedys bad and greedy approach towards the market destroyed him quickly. To make things worse, when things were not working out, Mr Greedy started to revenge trade in an attempt to recoup his loses plus some change which only accelerated his journey to bankruptcy.

It‘s often said that some of the biggest losers in the market are successful businessmen, doctors, dentists, engineers etc because they think their success in life will automatically fall over into the markets. Just because you were successful in other areas, doesn’t mean you will be when it comes to Forex trading. The Forex markets are on a completely different level, its a level playing ground for everybody.

Mr Perfect

MR PERFECTMr Perfect was a trader that we knew from a public chat room. He was the type of trader who was a bit of a ‘know it all’ and liked to focus the spotlight on himself. Mr Perfect usually got everyone‘s attention by flooding the chat room with his Forex talk in a very ’in your face‘ type fashion. He demanded that attention and ’Godly Trader respect.

Most of the time his Forex preachings were erratic and seemed to change from day to day, however his Mr Perfect personality managed to get him quite the following in the chat room and the associated forum. Mr Perfect was so supercharged by his new trader god status that he decided to open up a public thread with a title implying that he would turn $100 into 1 million dollars in a 1 year time frame. In this thread he was going to take newbie traders by the hand and show them each trade he made and explain his reasons for doing so.

Mr Perfect started delivering on his promise and posted trades that he took, but no one could seem to make sense of his explanations as they were rich with Forex babble and saturated with Jargon. Not to mention his reasons for taking trades seemed to be inconsistent and his money management made no sense. Despite the confusion and inconsistency, Mr Perfect was slowly making some returns and the attention on the thread continued to expand. The popularity and attention Mr Perfect was getting drove him to take the next step.

Mr Perfect opened a managed trading account, where traders could invest money in his trading ability. A trade copying tool was used so any trades Mr Perfect took would be duplicated on his fans real trading account. He was promoting the best forex signals so traders jumped at the offer.

Mr Perfects managed trading account got a lot of attention and he got quite a few investors that come on board.

mr perfect performance is not too bad, 18% in just over a month. His followers were impressed and started to sign up. Mr Perfect continued to flood the chat room and forums with his confusing market preachings.

But that didnt bother anybody as he was delivering on his promise and demonstrated he could make them money.

Everyone was pleased with Mr Perfects initial performance, however during the next few months things started to change.

Mr Perfects performance flat lined and people were starting to raise eyebrows.

Not only was he not making any money for his followers, he was losing them money with spread costs. Mr Perfect was a ‘scalper’ which means he opened lots and lots of trades at a time to achieve only small gains.

There were no serious losses yet so most of his followers continued use his service. Mr Perfect was still confident as ever and continued to preach his stuff in the chat room and forums while we watched him closely.

As the majority of people jumped on board his managed trade service, he never managed to make them any money. Mr Perfect was at one stage opening 30 trades per day which didn‘t really turn out too well. The spread costs were destroying the live trader’s accounts but leaving Mr Perfects stats hardly affected, as much as he was using a demo account to send his signals.

Mr Perfect went from Hero to Zero very quickly, his thread was soon filled with negative comments and he was no longer welcome in the chat room. Mr Perfect lost a lot of peoples money and walked away from the whole venture a nobody.

The lesson: Mr Perfect thought he knew everything about the markets and that all of his technical analyses were flawless. Mr Perfect had a lot of confidence in his ability as a trader when in fact he was actually relatively new to Forex trading and didnt really have as good of an understanding as he made out.

The phrase ‘A little bit of knowledge is a dangerous thing’ fits well with Mr Perfect, as he taught himself a few simple concepts and converted them into an over complicated, confusing format that he used to draw in peoples attention.

Mr Perfect was an attention seeker not a professional trader, he had bad money management and there was no consistency in his trading strategy. We were just counting down the days when it was all going to fall apart on him. We were actually surprised how long he lasted.

The real failure lied in Mr Perfects ‘high frequency trading strategies’ and the bad money management that come with it. Mr Perfect was only aiming for 3-5 pips profits, but risked 20-50 pips to do so. This is called negative risk/reward money management and is a sure fire way to burn yourself up in the market. It was just unfortunate that he took a lot of other unsuspecting traders with him.

We think Mr Perfect would probably make a good car salesman and should keep away from Forex trading.

Mr Lazy

Mr Lazy was a fellow trader that we met in the public trading community. Mr Lazy was looking for some guidance as he was overwhelmed with the amount of Forex information and strategies available. We took Mr Lazy under our wing as he was interested in learning how to become a good price action trader.

Well we regretted that decision quickly, we expected Mr Lazy to play the role of a keen student but instead he turned out to be an annoying parasite. My Lazy had no intention of learning price action trading for himself, he just wanted to bludge off our experience and be a fly on the wall when we were talking about what trades we were planning to take.

We soon caught on to what was happening when we noticed Mr Lazy was not receptive to the knowledge we were providing him and tried to gently cut him loose. The unfortunate thing for us is he had our private email and Skype details. Sigh!

Every couple of hours Mr Lazy was hounding us for trading signals, even at the most inappropriate times. We had our fingers on the short trigger for EURUSD when some vital Greek elections were taking place. The Greek elections were broadcasted in Greek. Scotch is from Canada and had to be quick on the Google translator to try keep up with what was going on in the live election feed. During the entire process Mr Lazy was bombarding Scotch with messages every 5 minutes asking him if he should go short yet.

Out of frustration we eventually gave him the cold shoulder until he got the message. We later discovered that Mr Lazy found someone else to annoy, and was receiving signals from his work college who had come up with a ‘miracle RSI crossover strategy on the 15 min chart’.

This was our ticket out and we finally got rid of him.

The Lesson: Dont be a Mr Lazy and try and leech off other peoples trading decisions or seek out Forex signals. Firstly these traders could be the worst traders in the world and you are blindly following them, holding their hands as they walk you right off the cliff.

Forex trading is a personal journey that you should take as an individual. You are responsible for your own trading decisions, get the proper education and become a confident trader so you dont have to rely on other traders to make your trading decisions for you. If you are looking for a simple but powerful price action trading course, then you stop by our Price Action Protocol page for more information.

Mr Rush

Mr Rush was another keen aspiring Price Action trader, unlike Mr Lazy, Mr Rush was hungry for knowledge and was taking in all the advice we gave him. This was a breath of fresh air, no annoying emails or Skype messages, just questions that would further Mr Rushs learning curve with price action trading.

However, as the name implies Mr Rush was trying to become an expert too quickly and wasnt displaying much patience. Mr Rush wanted to take all the right steps to become a professional trader, but he wanted to have completed those steps yesterday. Mr Rush was trying to run before he even knew how to walk.

Eventually Mr Rush‘s impatience consumed him. Mr Rush started taking every single pin bar formation on the 1 hour chart, across a variety of markets. At times Mr Rush would had about five intra day trades open while continuing to look for more potential trades to open. Mr Rush’s impatience had driven him to the shorter time frames and caused him to start over trading. He even started off by making a trading blog where he would record the steps of his trading journey, from a nobody into a millionaire.

His over trading and lack of experience washed him out of the markets, his blog went dead and we never seen him again.

The Lesson: Don‘t just throw yourself in the deep end; take the time to learn a solid trading strategy like our Price Action Protocol. Understand it, master it, test your skills on demo and keep your cool. Over trading raises a red flag that you don’t have control of your emotions and is an early warning sign to your impending failure. Realize that the trading is no different to learning any other profession; you need to go through the learning stages before youre put in the hot seat.

Apprentice chefs don‘t just take a 1 week training course and all of a sudden become the next Gordon Ramsay. No, it takes time and it’s no different to any trading system that you apply yourself to. The market requires patience, keep your cool dont be a Mr Rush.

Forex Horror Stories conclusion

In this article we‘ve shared real life stories of traders who didn’t make the right choices when it came to their trading career. This hand full of real life examples would no doubt be consistent with many other failed traders stories. Many would have made the exact same silly emotional choices that destroyed their trading future.

It really is common sense, these traders surely would have known subconsciously they were not getting anywhere with their current approach and were digging themselves into failure. Dont make the same mistakes these guys did, keep trading simple, keep your emotions in check and follow a simple trading plan.

This is why we are so passionate about Price Action trading. Its simple, powerful and stress free. Price action trading really brings out the clarity of the market. You will be able to read charts like you never have before if you make the switch to price action.