I recall my first major “blow up” trading back in 1999. All I had was $2000 to my name and I put it all in the stock market.
There was an internet company called “Internet Commerce” something or other. I think the stock symbol was ICCSA.
The stock was trading at $4 having run up from $1 in a short period of time. I had just learned about shorting stocks, so I thought I’d short this bloated stock with no revenues back to the $3’s. I took my $2000 and shorted it on full margin, doubling my position to 1000 shares short at $4.
Sure enough, as my luck would have it, it quickly climbed to $5. Then $6. Then $7. Then $8.
Then I received a margin call from my broker. And that same day, before I could act on it, they automatically closed out my position. I was so upset that they closed me out at the high of the day $8.50 without giving me a chance. Especially since the stock was getting ready to drift back down.
I checked my account balance and it actually said “-$2,000″. Yes, negative two thousand dollars. I was confused at first, but then realized this meant that not only did I lose my $2k, but that I needed to mail them a check for an additional $2k, which I didn’t have… I was numb with shock.
I used my next couple paychecks to pay this back, but the whole time I was upset with them, as I watched the stock drift down to the $7’s, obviously heading lower.
Months later, I checked this stock to see where it had fallen to. It turns out, it went on a dot com bubble rage and climbed all the way to $90… (Before eventually falling back to $1.)
So as I reflect now on my trading “career”, all I remember all these blow up and huge mistakes I’ve made. I’ve had some wins here and there but I’ve never had a good year. I’ve missed all the bull markets, sitting out. Or found myself on the wrong side of them.
And now this year happened, suffering a catastrophic loss. I can’t believe the misfortune I’ve endured as possibly the worst trader ever, with horrible timing and intuition. Complete lack of discipline. I take bets that are too big and go all-in, looking for the big score. More times than not, I am in a hole, trying simply to climb back to even.
So much time and stress just trying to make it back. I don’t know what it feels like to have a good year, to be up.
The stock market is the world’s largest online game with millions of other players. All we’re trying to do is choose UP or DOWN – and be correct in our timing. A lot of us are not actually “investing”, we’re really just “playing”. On the surface, such a simple game. Up or down. But once you add the thrill of real money and let emotions get involved, the game becomes amazingly complex. And I don’t think I have the patience and emotional discipline to be successful at this…