Stock Market Basics > discount trading brokerage

I Admit It: I Made A Mistake

It’s funny that you need a good scare to put things into perspective for you. A few months ago, I experienced that moment of clarity and wanted to share my experience in the hopes that it might help you become a better trader.

My wife and I have been trying to get pregnant for the last 2 years. Not unlike many couples, we sought the assistance of a fertility specialist. For those who've been through it, know how stressful, both emotionally, and financially the process is. During this time, we also decided that the job my wife had was causing too much stress and that she should "retire". This only added to our financial stress, but, we had been saving up for a rainy day, so we were ready to weather the storm. It was important for me to ensure that she be as comfortable and stress free as possible, so as to improve our chances of having a baby.

My aim was to make up for my wife's income through trading. I've been trading for years, which helped to increase the amount we had saved for a rainy day. So instead of saving my profits, it would go towards ensuring that there were no changes to our lifestyle.

Things have been great since then.

We decided that it was time to go the route of IVF as a final hope of a successful pregnancy. It’s an expensive procedure that isn't covered by insurance. It's all out of pocket.

During the last 4 months, I have been fortunate enough to have enjoyed some trading success. I have never been more confident in my trading abilities!

That was the start of my downfall.

I had decided to purchase shares in DXD (an ETF that shorts the Dow 30) in anticipation of a drop in the Dow after the Fed announced what was an expected drop in interest rates. I probably bought too early; however, I was confident that all would be good.

I bought DXD at $56.66 and while it closed a bit lower, I was confident the market would reward me. I was down about $300 (I'm comfortable with losing $500 per trade, having established my risk tolerance many years ago), so I wasn't worried.

The next day, DXD gapped up nicely at the open, and then drifted back to the $56.65 or so for most of the day. Until 2:15 when the Fed announced a cut in interest rates of 50 basis points. The stock dropped $1 on the news, and then bounced, only to drop further.

My trading confidence said it would bounce. Then it dropped again hitting a low of $54.49. I didn't have a stop loss in place and felt like a deer caught in the headlights. I was literally paralyzed unable to sell. I was down almost $2200 before I knew it. That's $2200 that I couldn't afford to lose.

What was I doing? Why was I in this position?

I was shaken after paying well over $6000 for IVF and related drugs for my wife, and now down $2200. That’s over $8k out of my pocket over a few days.

Then the markets started doing what I had anticipated they would do: they started to drop (good for DXD). I purchased another 400 shares to lower my average cost to $56.36. I was lucky enough to sell everything for about $56.80 to end with a $400 profit.

I was lucky. I was also very stupid.

I experienced a moment of clarity. The experience left me literally shaking. It was exactly what I needed to put everything into perspective and wake me up from my dazed routine. I needed to make a SERIOUS change to how I trade online.

I'm going to share with you what those changes are, and if it can stop one of you from experiencing the rollercoaster, the gut wrenching torment I had to go through, it will all be worth it.

So, sign up, check your email and look for the special report I've putting together. I assure you, it will be worth the wait.

Christopher Smith

Formerly Careless Trader

1Source4Stocks.com

If you are not a subscriber, you won't get this report. Sign up now!