How I Lost a 6-Figure Amount from Trading (and What I Learned)
March 4, 2015
5 Min Read
This is the week of trading transformations.I’m going to provide you with the ‘gateway drug’ - in other words, I’m going to teach you the most straight-forward and simple changes, which lead to the biggest instant improvements in your trading ability…this will then act as the catalyst for you taking a more enthusiastic approach with your own development.In addition to this, I’ll share an article with you that quickly became our most popular article of all-time - in just 2 hours of being online! It even brought the internet trolls to our yard:[caption id="attachment_4287" align="aligncenter" width="847"]
somebody obviously forgot to attend their anger management class this week![/caption]
Before that, let me tell you a little story:
A few years ago, I made my first real life-changing amount of money, when I pulled a six figure sum out of the market in less than 2 months. This was a triple-digit percentage return at the time, so as you can imagine, I was completely over the moon.The lengths I went to and the intensity I endured to pull in that amount led me to becoming burnt out and ill, which meant I needed to take a break for a month. I went from being the Duracell Bunny, working all the hours of the day - to one of the lame ‘other brands’ bunnies that they show falling to pieces after half an hour.Although I had a month away from the charts, the momentum from my big successes hadn’t worn off - I was raring to go and could feel my eagerness building like an athlete entering the final stages of their preparation, waiting for the big competition day.
And boy, did that big day come…
Straight away there were six opportunities almost identical to the one I had just made my big returns from. That’s right… SIX.I jumped straight into them all and waited for my next big lottery win from the markets.There was no luck involved in this; I had done my research and analysis, I had mapped out all the possibilities and above all else - I knew I was damn good at trading. If I had six opportunities on the table, I knew I was going to make a killing.Or should I say - I thought I was going to make a killing…In just 2 weeks, I had to close all positions and had lost a six-figure amount. Luckily it wasn’t nearly as much as I had earned previously, so I was still heavily in profit - but it hurt… it hurt like hell.
So why am I telling you about my failure?
Well that’s simple, because I don’t want you to have to go through the same baptisms of fire that I endured to get to where I am. I want to spell it out for you and make it as easy as possible.After my failure in the market, I reflected on what I had learned. In fact, I wrote a 10-page report on exactly how I had lost money. The conclusion was simple: I got over-eager thinking I had found six opportunities (which I had) and I went for them with the same conviction as when I had made my last big profit in the market.The resulting effect was a highly over-leveraged account (six positions opened simultaneously, each at the same size as one open position previously = six times above my risk limit), resulting in a margin call and subsequent losses.The sickening part was that all of the opportunities did exactly what I thought they would. So just trading one of them would have been good enough to make enough money to support a whole family for a decade. Due to my careless mistake, I was left with nothing.By writing the report, I never made the same mistake again - so I guess you can call that a win. However, if I had taken the same approach with my winning trades, rather than only doing a post-analysis on my losing trades, I would never have made that mistake in the first place.[embed]https://www.youtube.com/watch?v=sUJsAf9FWU8[/embed]Since then, I have taken a new approach to my trading that has helped me to grow and improve as a trader on a daily basis. The concept is: Adapt like Water, Absorb like a Sponge.This concept even applies to other events in life too, as I explained in a recent article that became our most popular article of all-time in just 2 hours of being online (please share with your friends – click here). However, the application to trading specifically leads to very, very successful trading.As Bruce Lee once said:
“Absorb what is useful, discard what is useless and add what is specifically your own”
So starting today, let’s start to work towards that approach.In my next update I’ll be providing you with specific tricks, tips and ‘hacks’ for improving your trading and adopting the Adapt like Water, Absorb like a Sponge concept into your daily routine.