How to Avoid Losing $22,000 in a Year
(San Francisco CA)
I have been a passionate investor for the last few years. I have had good performing days and...well..some bad ones.
How’s it going in midst of this depression? Well..I’m down $22,000 dollars so far since 2007. Unbelievable? Maybe. Possible? Absolutely. Am I the worst investor ever? I certainly made mistakes but I know 10x more than I did last year.
One thing is for sure: I haven’t given up and I never will. One investor said: “I’ve gone broke many times, but you don’t lose until you quit.” He is now a successful trader making millions of dollars.
So here are the reasons why I’ve lost $22,000 in one year:
1. Traded Against The Trend - I traded 100x more long positions than short positions in this bear market. BAD move. If you want an advantage in trading, trade with the trend, not against it.
2. Using Large Margins - I own a margin account that allows you to borrow money to invest more. BAD move. Even though I believe in using margins to leverage your trades, don’t do it if you’re still new to the game.
3. No Stop Loss Point - For most of my trades, I never set a “Stop-Loss” point in which I’d take the loss and move on to avoid further losses. In this tumbling economy, that’s the last thing you want to do. Now that I’m more disciplined, I saved my ass more than once.
4. Cockiness - I’ve always been successful using my intuition and my gut feelings. I’ve been probably right more often than wrong. Well…here’s a fact that is so simple and obvious, yet so hard for some people to accept it: “YOU WILL NEVER BE RIGHT ALL THE TIME” When you’re wrong, accept it and move on.
5. Market SUCKS - One thing no one can argue. This is probably one of the worst Wall Street climate we’ve faced in decades. Dow going from 14000 to 6500? Seriously? Let’s be glad we lived through this historical time.
Now losing $22,000 sucks. It really sucks. It makes me wanna cry. But I still LOVE investing. I’ve learned a ton, and I’m determined to succeed in this game.
One advice for you new investors: Successful Investing Will Take Time. Be Patient. Never Give Up.
My $10,000 Dollars
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