 Okay, hello everyone. It's it's Anthony from the trading floor here in London and amplified trading Very fortunate to be joined by our head of trading peers Just to give you a quick introduction What this short session is going to entail is that here at Amplify we have a mixture of We proprietary trade so looking at the futures market in a multi-asset environment So things like what's going on at the moment with the Brexit and trade wars You know it's great for us in volatility, but we also take people who are new to markets and one of the Recurring most common themes here is about new people who are trading Even those who experience and about how they get used to the idea of becoming comfortable with with loss And also this idea of a loss of confidence and getting back into the market and then regaining that kind of composure and so on so I Thought there's no one else better at all that I know Having known peers for the best part of I don't know 15 years something like that and Having him traded for even longer than that to to talk you guys through maybe some of these ideas about how do you get over a Big loss for example. So yeah, what's let's let's start with the with the big question How do you get over a loss? Well, yeah, good good question and you know, I think obviously trading is an incredibly difficult skill to to master and Certainly one of the big hurdles in that is dealing with the fact that you're going to lose money and it's a it's a It's just part of the the deal and I think you know ironically unless you're Yeah, I think you've got to learn how to lose money first before you can actually Learn how to make money. So I thought I mean I thought I would actually go extreme and use the example of my worst ever loss In my career, this is like the opposite of what most things you will read on the internet Which is about my biggest ever trade, but I think this is the whole thing It's really important to understand the opposite side. Yeah, biggest ever loss. So I'll just kind of briefly talk about how it happened, but then more about how I felt and you know emotionally and then actually Flip it on its head and in the end talk about how in many ways it was even though it's my worst day Perhaps in many ways, it was my most valuable day, yeah from an experience point of view. So so the biggest loss was 35,000 euros and I was trading German government bonds at the time and I was trading To the two year and the five year so I was trading the shats in the bobble Yeah, and one of the strategies we used at the time not so much now but was a spread trade where you're you're essentially long one and short the other one and So it's a hedged position. Yeah, so For most so really my error came in my my failure to hedge my risk now if To kind of put it into the context of a an outright trade if you're just trading one market It would what happened was really the equivalent of me not Putting my stop order on if you like. So what happened was I bought 1000 shats So 1002 year government bonds and I was supposed to be selling 400 bubbles Okay, to create my spread So in a spread trade you're hedged in that You're kind of market neutral then so if an event occurs out of the blue then both markets will move in the same direction and you're You're making money in one, but you're losing in the other and they offset Yeah, so actually what you're trying to spread trades about trading the changing shape of the yield curve if you like But you're market neutral in case any event occurs. Anyway, so I was long the shats So I needed to sell my my bubbles, which is my hedge my risk But I went to click sell 400 But instead of clicking the at market button, which is what I should have done Yeah, I clicked into the box on the ladder next to the bid So that means it's the same as an at market order as long as the bid is still at that price But the the split second I clicked yeah the bid flipped and became the offer Right and so my order didn't get filled and it went on to the order book as a sell order So I sat there with my 1,000 long shats and my sell order Unfilled Okay, what I should have done Was then immediately sold 400 at next price down, but I didn't I Was angry that I'd literally a split second late and I missed it and 400 you know just taking one price down, but that's 4,000 euros worse off Yeah, so 400 contracts 10 euros per contract So taking that would have been a fourth out as a split second and that's gonna cost me 4,000 And I didn't accept that and so I waited Right like five seconds tense I was waiting to see if my offer would get filled and I'd get the price I wanted but of course I didn't and then it flipped down another price and then another price So I'm left long With no hedge. Yeah, so that's my when I said my stop order. That's kind of what I mean I didn't get my my risk covered so So in the end I dealt with this badly I thought I thought right. I'm forget about the stop forget about the hedge. I'm just gonna try and get out of my long 1000 shats without losing money now So I put an order to sell because that flipped no, so the price I bought out was is now the offer So I thought so that I'm gonna try and scratch this So I put a thousand into sell not the price that I bought waiting on the offer didn't get filled Click down and then down and in the end I got out of it Like like five minutes later Maybe I can't maybe ten minutes later five to ten minutes, and I'd lost 35,000 euros And nothing happened. It's not like my biggest loss was off a major market Shock event really nothing was happening It was just my failure to manage that risk that escalated as I lost 35,000 euros now The the feeling I had during that five ten minute period Was I had the feeling that I had lost control So I was no longer in control And I don't know the best way to I mean you'll have felt this if you've been in this position but the best way to describe it is maybe You know when like you're on a roller coaster And you're just going up up the hill and you're back and then when it releases and you drop And it's almost like that feeling of zero gravity for a second or two. Yeah, it almost felt like that I think you've got a The reason why I know that is because it was that moment that Enabled me to almost self-learn learn something about myself in that that feeling Right was the feeling of me losing control and the point being If you lose control you're in trouble So I'll come back to that point later about this becoming a really valuable lesson, but So I lost 35,000 so I'm sat there and I'm Firstly, I wasn't allowed to trade again Right, so the worst thing you can do is immediately try and make your money back because now you're it's all emotional and desperate I wasn't allowed that was kind of taken out of my hands because I had a risk manager I mean I was trading trading firm and you have a risk manager and if you you know, I was out Okay, they were not happy. What's what's the conversation from the risk management team when they see that I mean Well without using the words that they used exactly. It's what the f in hell is going on. What what are you doing? Yeah, you know what? What what the hell? Yeah, just just get out, you know as in best form of risk management Remove yourself from the screen. Yeah, so yeah, I was told to go home And I felt I mean my emotions other than that loss of control after the event was it was like anger But anger at myself. I mean, I think There's a fine line here. Some people deal with loss by projecting that anger and blaming something else, which I think Very unhealthy a lot of traders used to do to me. Yeah, right And so some some people will you're never wrong, you know, it's something else that's happened Yeah, but you can blame it. You know the last person you want to blame is yourself Yeah, and so you you project that on two other things. I I never really Was like that so I was angry at myself. It was like anger and frustration, but then it Then it shifts to something way more than that. I think like guilt I definitely felt and guilt And an ashamed And actually then embarrassed because then I remember walking home and I Didn't tell my wife, right because I was Embarrassed yeah about what I'd done and actually, you know, the so she's not gonna watch this video And go yeah, you owe me 35,000 well In the end it turned out to be very positive for me. Yes, this experience But definitely at the time I was literally there was a shame So did your family pick up with that like you must have changed like for a period. I think I'm not I'm not very You can't really see my emotions particularly So I don't wear my heart on my sleeve. Yeah quite introverted in that way and I think that So even though I was feeling it big time inside or perhaps I can yeah put a face on that shows I'm not bothered, but I mean I was that was but then but then But then it's about You know once you're in the one is once once is done and you're at home and I'm feeling embarrassed and ashamed and It's then about the task Ahead and I think what some people I think personally the wrong way of The way forward what's the next step after this has happened. Yeah, I think the wrong approach is to start thinking right How do I recover from this? I've got thirty five thousand euros I now need to make back and like being daunted by the mountain that you've now got a climb Just to get back to where you where you started Because I think if you go down that path of thought then You're just you put yourself under too much pressure You're most likely gonna be continue to be emotional about what happened and then normally when the emotions run hot your Tends to be it's more likely you're gonna be irrational and you're gonna make bad choices. So For me it was about what's critical with dealing with loss is dealing with loss By accepting that it's happened Understanding you can't go back and change it. You can't get the money back. It's gone so But it's about you know accepting that and then just moving forwards and It's very easy to say that it's very hard to actually be Okay, you know get just have closure with that event that's happened Now I need move forward. I think For me one of the best. I mean I said I said I didn't tell my wife, but one of the best, you know I was trading My my best years were actually when my kids were really young like when they were Like I had a six-month-old and let me think like a two and a half year old, right? So you got a baby and a Terrible twos. Yeah And I'd get back to the house and my wife's like There you go. Here's here's the baby that's been crying for the last four hours Where have you been your turn? Yeah, that's my life now, right? so but my point is that then your You've got an entirely different environment to have to concentrate on and obviously your six-month-old Doesn't care that you Messed up your risk management and lost 35,000, you know, they need to not be changing. So It's quite a good leveler. And I think it's for me. It was a great. I Purposely in a way purposely didn't talk to my wife much about my trading Yes, you know on that point. I've met a lot a lot of the traders that I've ever met they all I Don't think I've ever met one that doesn't say that where And I know everyone manages their relationships with their partners differently But all of the traders I know say they never talk about trading With their partners because they just don't want to involve them in that I mean, it's okay like you said for you to deal with that anger and frustration or disappointment But then it's almost like they don't want to burden their partner with it. Yeah, I saw the sense That's so for me. I think it's purposely not doing it so that I have two very separate environments Yeah, so that I can be in one which is at home and not And it having no connection to your markets and my trading my P&L having that separation Also, I think it's really hard for someone to understand. Yeah, if you're not a trader, it's very difficult to understand The emotions that go with it And so I think it's hard for a third party who's not a trader to really be able to help and sort of engage on that so So for me that was you know the way I dealt with loss was to Get to my safe Environment if you like you have outside of markets and trading and get on with the changing of the nappies and all the rest of it and then and then Just just Deal with it But always with the knowledge that tomorrow morning. I'm gonna be back at my desk So I'm gonna have to at some point get back on the horse if you like, but my P&L zero, you know, it's a new day and I'm gonna move from this point, which is zero. I'm not gonna move from this point. That's minus 35,000 Yeah, I think that's really key. Yeah, so so from a Practical point of view so for a lot of the people that will watch this How can they create some kind of process then to build that confidence back again? Because it's not like or is it where you can just go back in and trade that thousand contract size again Or do you have to work yourself back to that point? And if so, what's that process? so I think It's two schools of thought on that. I think that for less experienced Traders, I think a really good policy is after a loss loss making day or Week or whatever time frame is to D-risk so trade smaller size, which is the exact opposite to what your emotional Self is trying to do because you'll often see some traders They've lost money and they're desperate to make it back. So they increase their size to try and make it back faster You know, that's your death warrant. So it's about de-risking so I would half my size or down to a quarter of my size and Just start going back to the basics and just trade by trade You know building back into Into it and I think but then you know in the end. It's also about backing yourself trusting yourself Being confident in what you're doing How in here where inexperience is tough like for me by when I had that bad day I you know, I'd had a couple of a few years I don't come in at three maybe three years under my belt as a trader. Yeah three years of you know consistent Yeah, success. And so for me it was always like, you know, my my my consistent performance over a long period is always that Comfort blanket, you know that understanding that I can't do this. And so yes, the wheels came off But I know if I put them back on properly then I can again trade like I had done but But I think de-ripped for but if you don't have that experience to Draw on as for confidence then de-risk and go back, you know, it's back to zero And you de-risk reduce your size and just slowly trade by trade, you know and just Understand that you can't make back loss It's lost So it's about just looking ahead Okay, but I'll to kind of finish perhaps that I mentioned that this was probably the most valuable day of my trading career Even though I lost the most money and that's because I got that feeling That loss of control. Yeah. And so that was that self awareness so From that point on if ever I felt Just a slight hint that that Feeling was beginning to rear up. I Was then I take my trade off stop but then that's so that's actually about self-awareness and As importantly the discipline right the self discipline to act Yeah, on your self-awareness, right? And then that's the You know if you read any trading book you listen to anyone who's traded for a long time in the markets That's like the recurring word. I would say that you hero in many different ways Yeah, but I guess a good way to finish them. Yeah for a reason is discipline. So well, look, let's We'll end it up that thank you for your time. I should I know you're a busy man But obviously we're we're gonna post we're gonna publish this onto our YouTube channel And what I'm gonna say to any of the the people watching this video if you do have any questions for peers Feel free to leave a comment on the on the video itself And then when he gets a bit of time perhaps next week or two I'll get him to reply to to people So absolutely feel free to to discuss in the community. It'd be great to get some comments on the video Otherwise, don't forget to subscribe to the channel as well We do updates every day and a week ahead strategy report, which we'll cover on a Monday morning But otherwise, thank you peers. Thank you. Thank you for watching and Have a great weekend. We'll see you again soon. Thanks very much