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Guy who blew threw $2,500,000 in a year of trading
One of the biggest misconceptions with new trader is the amount of capital needed to trade. If you asked us, how much you should start with, our answer is always $0.
But how am I support to trade than? (what the new trader is thinking)
Well do you know how to trade? No? Ok than its $0
You need to learn how to trade first, there is a reason why over 90% of new traders fail within the first year. Its because the process is as follows :
Starting buying shit
Pray that they figure it out
Pray being the key word, they already fail, right out of the gate, sure 1-2 out of every 100 get lucky, however trading is not a game of luck, it is a game of hard work and knowing the odds.
Below are some of the excepts from the 5,000 word essay written by the trader who inherited $2,500,000 and not only blew it, but is now bankrupt meaning he lost more than what he started with!
All of the quote below are from a trader names "Wall Street Bets' and you can read the full article above. For anyone trying to be a Day Trader this is a must read in our opinion.
How it began:
"I wanted to trade. I had always wanted to trade and the world of daytrading seemed like a utopia to me. At first, I had success. People might remember my big Apple bet a few years ago where I essentially made $30,000 in under a week. Looking back at it today, much later, I regret winning that trade. Perhaps if I had lost everything on that trade, it would have disgusted me from trading forever and I would still have much of that $2.5M today. But I won, and I won for a good while, and it kept me going.
Then, I began to lose.
I lost $500,000 due to the oil crash in late 2014. I had a ton of Canadian stock (the TSX went down something like 30% at some point) and many, many oil stocks. I made it all back in early 2015, then lost it all again in the first six months of the year, plus another $500,000 for the rest of the year. I was panicking, hardcore, as a million dollars is no small amount to lose, Canadian or American.
I lost $100,000 in one night to Brexit. Another $50,000 betting on Hillary." Says Wall Street Bets
For any one who is new to trading, doesn't this sound some what familiar? 1 lucky trade, than a blood bath of loss after loss. You hang onto that 1 win to the grave though. If anyone asks about your trading, your first to talk about that 1 winner, but very hush hush about the sea of red in your account.
"So to make a short story, this brings us to today. From the original amount, I have $325,000 Canadian left. I have a $100,000 personal loan at 8% (yeah), a $51,000 credit card debt accruing at 19% per year and various debts ranging from 6 to 10%. Oh man I feel so dumb – I could have paid the car I am driving in cash, but somehow I ended up getting financing because… Because.
If I liquidated all my positions and stopped trading today, yes, I could probably repay my debts. And then what? I would have almost nothing left, nothing at all. My $2.5M would be gone forever and perhaps most of my mental sanity along with it. What’s the point? Truth be told, at this point, I have really nothing to lose. Worst case scenario, this yolo fails and I go bankrupt. If I'm going out, well, I'm going out big. I'd rather take my chance to get my money back." Says Wall Street Bets
Before he even put the trade on he failed, he has already admitted he has no idea what he is doing and the money means nothing, he knows its all gone and never coming back. Time to seal the coffin and burn what's left. If you read the story on the Penny Stock Trader who lost $50,000 last month, it was the same bat shit idea. Buy a bankrupt penny stock (his reason for investing his last $50k of $200k) was that this bankrupt penny stock was not going bankrupt. I cant even make this shit up.
These gamblers know the moneys gone but there just like who cares, burn the rest. Trading is more mental than anything, and any real trader will tell you. Coming into a trading day with stress or any negativity and by the end of the day your PnL tends to reflect that poor mindset. In this example, his mindset couldn't have been worse.
"My #Yolo is designed in a very specific way. It’s designed so that even if I am wrong (which I am not), I will not lose money. Yep, it's that good." Says Wall Street Bets
The brash cockiness in his trade is another tail tale sign, he has pissed through $2,200,000 in an orderly fashion but not this time! Even if hes wrong, he wont lose a dime!
"I’ll be blunt: Apple will drop 8-10% in afterhours (maybe more), it will open down 15% the next day and end the day down more 20%. Yes, that’s how bad it is. And I’ll be there to earn a fortune from it. As I said, I want my millions back." Says Wall Street Bets
Listen to what he said, Apple will be down 20% for no other reason that he wants his Million back, sorry kid thats not how it works. By the way that has never happened in Apple before, repeat NEVER happened. But guys, come on, Wall Street Bets has only lost $2,200,000 he knows what hes doing!
"But recently, I have been on a hot streak (100% success recently) and I just need the streak to last one. last. time." Says Wall Street Bets
Said every gambler in vegas, win, win, win, keep playing kid, keep doubling up! The last one bites the dust, story of every failed gambler out there.
"So, what will happen on earnings? Well, simply said: IT IS SIMPLY NOT POSSIBLE FOR APPLE TO SPIKE UP POST-EARNINGS." Says Wall Street Bets
Dont feel bad for this loser, he deserves every dollar he lost.
"I have been screwed by big funds before and I have designed this trade so that even if I get screwed, I won’t lose money."Says Wall Street Bets
If you cant own up to the fact that your a shitty trader, your going have a hard time being a successful trader. It is you and only your fault if a trade failed, plain and simple.
His last and best quote that sealed his fate in all caps by the way:
"100% CHANCE THAT APPLE DOES NOT TRADER HIGHER THAN $128" Says Wall Street Bets
A picture speaks a 1,000 words. R.I.P. Wall Street Bets, R.I.P.
What did Wall Street Bets do wrong?
- put on a trade to make all his money back (never works)
-a trade based purely on emotions, nothing factual or even remotely technical
-claimed his risk was $0 yet he actually lost his last $250,000
- only focused on what he was going make, with a 0% chance he was going to lose
-blamed others for his shitty trading
We could go on and on of all the dumb shit Wall Street Bets did wrong. The main takeaway for the people who think more capital is the answer to your problems, its not. Learning how to trade is more important than the amount of cash you can throw around.
He had enough capital to invest above all things unto educating himself on how to speculate and invest. It takes years and years of practice to become a successful investor. His first mistake was to jump into the market without the pre-requisite education and psychological appraisal of the financial markets.