How my forex account blew up on USD/JPY Flash Crash

Oops… I was caught in a flash crash. But I had predicted the losses. So how on earth did my account blow up?

In the past seven years, I generally have been able to boast about my winning trades and investment strategies. My most recent wins included predicting the time of 2018 stock market crash six months before it happened and getting out at the absolute peak with over 600% return.

This story is no different. On December 18th, 2018, I predicted a shift in the USD/JPY pair to the downside during a LIVE webinar. On December 20th I advised my Premium Investing Group members to get out of their bullish position and short the pair. This advice was based on a combination of technical analysis such as the Ichimoku Kinko Hyo indicator, and fundamentals such as the FOMC guidance. Sure enough, my students applied the strategy and got on with the money making. Here’s a snapshot of the chatbox in our Premium Investing Group:

Regardless, on January 2nd, 2019, I saw the biggest loss in my portfolio in my entire career.

How the Flash Crash Caught me LIVE

It happened while I was hosting a LIVE webinar for my premium Investing Group members, minutes after I had reminded them that we could see further losses in the USD/JPY pair. Sure enough 20 minutes later, and BAM! I was trying to send a risk disclaimer to my own email during the webinar to show it to my audience, highlighting how important it is to invest only the money you can afford to lose when I saw the email from my broker:
Your account has been liquidated.
Now you might ask if you knew this was coming, how the heck did you LOSE money?
The answer is simple.

“I forgot to follow my own preach. And sure enough, I lost money.”

This doesn’t always happen. But after I sent the strategy to my students, I completely forgot to get out of my bullish position on December 20th, 2018, and then got busy with the holidays. I only remembered about my position when I received a margin call from my broker. At this point, for reasons I explain in this video, I decided to feed my account instead of taking losses.
I was planning to increase my portfolio funds after the LIVE January 2nd webinar. But at approximately 5:30 PM EST, while I was still hosting the webinar talking about my plans, the USD/JPY saw a flash crash. It dropped to as low as 104.67 within before erasing some of the losses. The whole thing is captured LIVE as I noticed an email from my broker saying my account has blown off. I lost the power to speak properly for a while. Check the whole thing out in this video.
The moral of the story? Listen to your own advice! And remember that as the 4th point of the IDDA technique, you must calculate your risk tolerance before deciding on the investment strategy that is suitable for your portfolio. Don’t forget to complete your risk management due-diligence before developing your investment strategy.
Now I’d love to hear from you. Let me know via email or in the comment what you would have done differently to prevent this loss. See you in the comments!

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