A $60,000 loss -- Who needs a game plan right?

A $60,000 loss -- Who needs a game plan right?

There’s a reason in trading, one of the most popular mantras is “Big wins and small losses,” or “Cut your losses and let your winners ride.” It’s a simple saying that pretty much notes, “Live to see another day.” I’ll never forget one of my biggest losers that taught me some of the most valuable lessons trading can teach you. They say you never learn a lesson like when you lose money, and learn I did. This one almost took me out of the business. It was the main reason my partner and I started Trading Experts.

Let's take a step back and see just how fucked I was that I surmounted a loss equal to a brand new Porsche 911. It’s the summer of 2011 and the hot topic of the time was the Debt Ceiling Crisis. If you’re not familiar, I’ll very briefly summarize; the general public thought the world was going to end if the debt ceiling was not raised. In reality, it’s been an arbitrary number our Government has no chance of paying off any time soon. They’re going to keep printing and spending money regardless. Even knowing this, CNBC was running their infamous “MARKETS IN TURMOIL!” fear-mongering special. It was the popular subject of all the news stations. It all came down to a congressional vote which didn’t pass. Now leading up to this, I was sure to get flat all my positions to avoid the knee jerk random reaction that was surely to follow in the markets. (Shout out to Brexit for a more recent example)

Initially, the market got absolutely smoked. The reaction, coupled with the financial crisis in our rear view mirror, was that the world was ending. During the month of August 2011, the S&P dropped 200 points from 1300 to 1100. Looking back on the chart, just a small blip, but back then it was absolute mayhem. I began listening to all the fear mongers, thinking this is my chance to hit the big one! The S&P is going to ZERO and I’m gonna ride it all the way down!

Being inexperienced, I followed into the fear mongers’ trap and began to short every bounce. I had absolutely no plan, just that I had to be right.

At this point I feel invincible, I was able to...............................................................................................................................................

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