I'm going to be smart by taking minimal risks in future
I wrote this in the hope that no one else will make the same mistakes I did and that the best players in the game aren’t the ones going crazy putting down the big bucks but the ones being smart by taking minimal risk for maximum reward.
AT THE START of December 2014 I decided it would be a good idea to look into trading binary options. I did some research and found the company Banc De Binary to be the number 1 in the world for trading binary options. So I signed up with the minimum deposit of $250.
The next day I received a call form one of the employees, Jonathan Reed (my account manager.) He showed me around the platform via skype and put me in some small trades that made about $100 in an hour.
Later that week we talked again and he pushed me towards a big trade on Apple, but there was a catch. I needed to make an investment of $15,000 into the account. I told him there is no chance for a 20 year old with a mortgage, on 4th year apprentice wages to make that kind of investment.
Eventually we came to an agreement of $10,000 (most of my savings).
After almost two weeks of trading we made 100% (just over $10,000)
I felt on top of the world, but then he started pushing me again to get the account moving forward with more funds and start making some serious money as he called it.
With some help from my parents they agreed to fund me $10,000 and Banc De Binary would match that by adding an additional (Bonus) as they called it of $10,000 to trade with. About a week went by we did a few trades won some lost some and ended up breaking even.
Then I received a phone call from Jonathan at 2am to inform me that there was a big trading event happening on the Thursday night and that he will be getting all of his clients to invest big in this event, so I said yes to trading the event. Thursday night came and I made sure I was ready for this event. I got onto the platform and opened up ready for the event.
I opened up some trades on currencies and about 45 minutes later I had lost $18,000… Not the best feeling in the world and I didn’t exactly sleep well that night.
After a few days away from trading just to calm down and get over the massive loss, my account manager got me into an educational session on fundamental analysis and got me into a few small trades, to build back my confidence and make back a few dollars.
Then came the big oil trades as he put it. Jonathan told me that to get onto the oil trades I would have to become a VIP member, which means I would have to invest $50,000. I told him there was no chance in the world of that happening. He tried pushing and pushing me to max out my parents credit card and said we wouldn’t trade with the money that I invest off the credit card just the money that is already in the account. After a two hour phone call I told him to try on a different card that I knew only had $2,500 and he said its okay if only $15,000 goes through, I laughed and said we will see what happens. The $2,500 went through and Banc De Binary matched it by funding an additional 200% ($5,000) to trade with. We opened up five oil trades for $5,000 each. So far the first 2 trades have gone off, one winning and one losing. The rest are to expire on march 31st and late June, But they need to close above $54 a barrel which is not looking very good right now.
With the last of the account being at $13,500 we had another trading event coming up. My account manager got me into an event to trade with half of the funds remaining as he promised me that this trade was going to be a big pay off!We ended up opening 3 trades for $3,000 each on Dubai for a 20 minute expiry (or in other words he had just gambled $9,000 of my money.) The stock dropped $0.85 after 40 seconds and never came back up. He then called me to get back on the platform to do a recovery trade with the remaining $4,000.
Me panicking and not thinking about it I listened to him and opened up the last trades with what I had left.
One and a half hours later I turned my laptop on to read that my account had $500 left after one night…
As you can imagine that turned into yet another sleepless stressed out night.
I called my account manager straight away to ask him what the hell just happened he had just lost 95% of my account! His explanation was that an announcement was made about the USD falling and made the Dubai stock drop. Then replied “I will talk to the recovery department and see what I can do”.
After a few days he came back to me with “if you put in $3,000 they will invest $8,000 for you to trade with”. I thought he was joking, I told him why on earth would I give another $3,000 to a company that just lost me over $20,000 USD. I asked him where the hell would I get the money to do that? I immediately told him to put me on the phone with the highest management in the company. I managed to get on the phone with the head of customer services and gave them a mouth full. Their reply to me was that if I invest $5,000 they would put in $6,000 to trade my account back up. Now I am in the process of finding out if there is any chance to get out of the remaining oil trades and try and get back any money that I can and shut down the account.
This whole experience has taught me a lot of things about trading and investing in general. Number one is that the fastest way to get rich is slowly, with minimal risk, hard work and the right people like Peter at the TradingLounge who has been a massive hand to me. And, to always follow the biggest rule of investing — to always protect your capital.
Michael J VIC