In late '99 I was trading gold futures calls. I went for a walk and the gold price spiked $ 17 + in 30 minutes then back down again. My account went up $ 400,000 and then back down again. And I compounded that mistake by procrastinating again and again (hoping) and ended up with a small loss from what was once a million dollar plus position. I don't think too many people anywhere can beat that one ... :eek: There is a scene from a movie with Danny DeVito and Kevin Spacey (The Big Kahuna) and in it they are talking to some young kid about character and how one obtains it ... one of the oldsters turns to the kid and says character is something you never develop until you do some things in your life that you completely and totally regret ... If you have no regrets, you have no character ... I always loved that line. What I learned : Actually, this may sound a bit strange, but the most important thing I gained from this was even more confidence in my abilities ... If I did it before (hit it big) I can do it again. Maybe it's just a psychological sop to my ego, but I think it's something deeper than that, and I am very happy I had this experience. I'm happy because it happened at the very beginning of my trading career, and I'm happy to have had such an amazing thing happen, even if it turned out all wrong because I got to see quite a ways into the depth of my character (losing a boat load of money inspires more than a little self-introspection I wish I could say I learned my lesson forever and that I am the perfect trader and would never make that mistake again, but that's not the way trading works (I think). I think the way it works is that good traders try their damndest to limit the damage from the mistakes they know they are most prone to make based on what they have learned about their own character. I'll never be perfect, but think I will always (thanks to this experience) be prudent.
Back in the early bear days I was trading a small etrade account ($5000) and didn't know much. At the end of the day, while I was still at work at my previous job, I noticed something about Apple that interested me. I don't remember what it was at the time but I decided to buy at the close in the 50's using margin. This was about 5 mins before they announced that they wouldn't come close to earnings and it dropped immediately into the 20's. I didn't check it again until i got home that evening and turned white when I saw the price. I actually was convinced that it had split and went searching for some good news. I ended up selling the next day at 28. I think I was left with about $900 in my account. I am convinced that the same thing may have happened somewhere along the line when I was using a larger account, and so look at it as a relatively cheap lesson on the risks of using margin, having no risk management and holding overnight. I have not held anything overnight since then. It helped knock some conservatism into my trading which I don't believe is a bad thing in this market.
Worst Trade = My first trade! With the age of 16 I bought for 3000CHF (All the money I had and I worked for that one summer) options on the Swiss Stock UBSN at 1.56 per Option... Ended up with the bank statement that the option was expired. Most Exciting Trade: a scalp in Exodus Communication one year ago Long 25'000 shares at $0.23 and sold three minutes later at $0.41. I had a method to trade EXDS with the Level2 and a one minute chart. But this method only worked for about two weeks... Best Trade: Each time I do what my brain wants to do and not what my emeotions want to do...
buying puts on the QQQ @ $15 per contract then selling @$40.... those puts closed around $285 on expiration. After that i learned how to let my profits run
hey all, these trades described are all pretty much what I was describing in the first post as trades we had no control over....at least not in the extreme volitility. Or after hours earnings, news, etc. Yes, some of you pointed out that you did not take your profits/losses quickly enough, or you took them too quickly. The Girlfriend for wife trade being a standout exception But I can see how you could have learned from all these experiences. So that certainly made all these trades part of your experience and impacted your trading mentality, which was what I was hoping we could share with each other. I will now share a trade I only witnessed. It taught me something, and unfortunately, I have not been able to implement the strategy yet, but have it in my arsenal for the time if a similar opportunity ever comes by. A guy I was trading with (major hitter) saw on the news wire that a 6mm share buy order (mkt on close) was entered by some institution. (probably an mutual fund?). It was in AOL. He calibrated his watch to NYSE time exactly. At about 5 seconds before the close, he put in a market order to short a TON of shares. 40,000. Now this was when AOL was a high flier and high priced. The 4pm closing price was what it was....don't remember exactly. At about 4:10, when they had matched orders, it printed 12 pts. higher than the prior trade. So now he had sold short the stock at that high price. The next morning, on the consolidated tape, it opened DOWN 4 pts., but that was still UP 8 pts from the 4 pm close, so he made 8 pts. on a trade he was virtually positive was going to work. Now this guy was a real experienced trader. I knew then that experience paid off. No one else I knew of made that trade, yet everyone saw the same news story scroll by. So he banked 320K and didn't even blink. To him it was just an obvious play and another trade. I guess that is why he gets to trade from his yacht in the carribean, while I am still commuting to the office. But I learned to watch for extreme imbalances. Maybe some day..... RS7
Tuesday before the '87 crash, I sold my oex puts (2 whole contracts) for a loss of 1/2. Had I held them a week more, they would have been worth (at their top) about 60k....this was on about a $200 investment. But at least I didn't lose much But again, I didn't learn from this....it was just luck..(bad in this case). You at least mad 200% plus. No one ever really sells at the high. I was long VERT overnight once and made 9 pts at the open. I was thrilled. It ended up closing 70 pts.higher. Today I think it is about 25 cents a share. So I was wrong, and I was right. Lucky and unlucky. How do you look at this one?
It is worthless to look at such market events under a micro-scope, for there will never be a clear right and wrong, there will only be our peceptions... What I have found over the years is that what I percieved to be the right thing in the micro-view was more often than not the wrong thing in the bigger picture... In this game more than anyother I believe your perceptions of right and wrong will get you into a lot of trouble in the micro frames... You must learn to see the whole room, instead of constantly squinting through the key hole Publias
Yes, well that was the point I have been trying to make through this whole thread. Look at the first post here. My intention was to find what trades REALLY were trades you COULD learn from....such as the AOL trade I talked about 2 posts back.
And if it were not 90degrees here in Dirty Jersey it would snow today That is a tough break, but that is the beauty of this game, there are an infinate # of opportunities to redeem yourself Good luck to you, Publias