Losing Control Over Risk Starts With One Mistake: The €400K Challenge

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— 5 min read
Losing Control Over Risk Starts With One Mistake: The €400K Challenge

Passing a Two-Phase Verification Is No Walk in the ParkEspecially when our imagination is fueled by the possibilities offered by the largest available ProTrader account in Fintokei.A perfect example is one of my previous challenges on a €100K account, where the verification for the first phase alone lasted a staggering 49 days. Even though I eventually passed, I was "taken for a ride" three times.It was those setbacks that motivated me to describe the most common mistakes traders make.

At that time, I pointed out the "demons" that often accompany me in trading: rushing something that should naturally result from consistently executing my plan, unnecessarily getting too close to the daily loss limit—something that then needs to be recovered, which is far from easy—and excessive trading activity.

The explorer connected to the trading account shows that I spend over 80% of the time in some position. I noticed this at the end of the previous week but failed to draw conclusions that could have protected me from taking several steps backward.

Excessive Trading Activity

This is where I need to pause. Excessive trading has the potential to derail our entire plan, disrupt our focus, and corner us—entirely by our own doing. Very often, it comes hand in hand with the urge to speed things up. After all, isn’t achieving 30% of the target in two weeks a satisfying result? Of course, it is. But that’s precisely when relaxation sets in, accompanied by a false sense of security: "Now I can push harder."

Sure, I can push harder. The problem begins when oversized positions come into play, and once the account returns to the starting point, we find ourselves unable to close those positions.

As of today, the €400K challenge account looks as follows: due to the proximity to the daily loss limit, I shouldn’t take any trades today. Pushing closer to that threshold is a razor’s edge I must avoid.

A Technical Perspective on the DAX

On the H4 timeframe, a bullish signal was generated on Wednesday morning, with a target at the upper Bollinger Band.
On the D1 timeframe, a bullish signal with a target at the upper Bollinger Band was generated on June 26, 2024.
The weekly IBW map, after reaching the first bearish target on Wednesday, July 3—two days ago—signaled a bullish structure during the late morning hours.

From an intraday perspective, since Wednesday, we haven’t observed any clear bearish structure.

Knowing how the situation looked on the Bollinger Bands, I tried to catch the bottom as early as Tuesday, aiming to add to the position later and build a larger one. Unfortunately, my inability to effectively manage long positions took over, and good entries were closed at the first sign of resistance.
Wednesday’s session reveals a clear tendency to play short positions—despite evident bullish structures. Positions marked with red arrows should not have been taken according to the strategy, while green arrows indicate where I should have entered long positions.

Thursday’s session – one mistake that triggered an avalanche.

From the morning, the structure was clear—unequivocally bullish. Despite my challenges with managing long positions, as you can see, I was able to accumulate them. I endured the first drop below IBM5 and the approach to IBL. However, when the price returned there again, something inside me snapped. I closed my long positions and immediately switched to shorts.

Where should the SL have been placed in this situation for the long positions that I reversed?
It should have remained where it was—just below IBL—or, with a more open approach, below IBL89. This is especially true given the awareness of the bullish Bollinger Bands (BB) and weekly IBW structures.

The market often gives another chance.

Not always, but the market very often allows us to correct our mistakes. If they weren’t too costly and we aren’t in berserker mode, we might be able to take advantage of it—today, I couldn’t.

Returning to yesterday’s session and that one mistake that toppled my entire plan.

Amid directional structures from higher timeframes, I had no right to take those short positions. Only long positions were permissible. Yet, I sold the lows twice.

At this moment, with the structures from BBD1 and H4 having reached their targets, we find ourselves in an environment shaped by a bearish weekly Bollinger signal, with its target at the lower band. Unfortunately, today’s result doesn’t allow me to even speculate here and forces me to revisit this next week. If the market unexpectedly reversed today, I would only be able to observe it from the sidelines. How pleasant would it be to have capitalized on the bullish structures, leaving the account with a solid profit in light of the remaining bearish BBW1 structure?

Sometimes, we tend to get overconfident and allow ourselves far more on the market than we should. Such situations are necessary to bring us back to reality. The key is to draw lessons from them and translate those into the final result of our efforts.

I have no doubt that this challenge will be completed, but ending the week this way is far from enjoyable.

The only thing I regret and am angry at myself for is not finishing the week at the breakeven point but instead letting the account slip to a -3.3% loss.

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