Everything looked so far so good and the bot made about 10% over the first 5 weeks, and I even managed to withdraw the profits into my bank account here in Singapore within 2 days.

Towards the end of December 2012, talks on the Fiscal Cliff were ongoing and made the market much more volatile than usual, but I thought nothing of it. At this point, I started to become complacent and began to monitor my accounts less frequently. I imagined that the robot was a bulletproof product able to withstand any kind of market change, and continue to generate passive income for me indefinitely.

I mean, the bot was said to be able to withstand a drop of 300pips with my settings, and I bet I would be able to do something if I saw aggressive movement in the market. But I was oh so wrong.

On the 4th of January, I received a call from my Aunt saying to reduce the starting lot size (a parameter of the bot) of the bot, because the market was on a downslide and the robot was placing Buy positions at an increasing rate & weight. It does this so that the buy line moving average will drop & all positions can close for a profit if the market turns up just slightly.

So I quickly logged into the VPS hosting my trading accounts, and saw that each of my $10,000 account had a floating P/L of about -$4000, and the positions placed by the bot were of exponentially increasing lot sizes. I had prepared myself for this day, when I would have to intervene with the robot’s decisions and to stop my accounts from going bust! Well guess what, I was dumbfounded. I had no idea what to do! All I knew how to do was to login to my VPS, and to tweak the starting lot size, and to close positions. I had no idea what most of the buttons in my MT4 platform was used for.

I did what I could and reduced my starting lot size from 0.10 to 0.02, but it was too late. By the end of the day, GBP/USD slid 3 points from 1.63 to 1.60, and 3 of my 4 accounts were wiped to about $1000 left (I got lucky because I turned off 1 of the accounts a few days prior and all my funds in there are still intact).

I knew I was risking all the money I deposited, but then again, I thought I could have easily managed any situation that comes up. Barely 2 months into this, and I got myself into a $23,000 hole! What was I thinking?? I was so engulfed with the idea of “free” money and passive income and rushed into this investment without even learning how to operate the robot properly. I realised I had no idea how to manage a crisis if one were to ever appear!

I felt really stupid and to say the least, it must have been one of the most depressing days of my life.