So, this happened. A cautionary, true story.

[dmiles 19]

I wanted to post this experience I had as a word of caution to all traders in the BBT community. 

I come from a background of successfully managing a sizeable IRA account as the result of 40 years as a medical imaging engineer. I guess I've been a swing trader since before that was a thing, and have always been very happy with my results, and I enjoy it very much.

Early in my career, I helped write code for some of the earliest CT scanners, and later MRI machines. When we started installing these machines, there were some extreme high pressure situations. These machines were not on every corner like they are now, and if I didn't keep mine running, there might not be another one available for several hundred miles. I loved it, and still do.

This past September, I found Andrew's book, read it right away, then got his second book and read it, and then I did the same with Bryan's book. I became a lifetime member to BBT, and proceeded to paper trade with a 3 month subscription to the BBT DAS software. I probably opened my CMEG account sooner than I should have, and went live too early because hey, I'm different, right? I have years of "experience" with trading the market, right? Then in the beginning of December, I opened my IB account, with enough to make sure I didn't have to worry about the PDT rule. I've been struggling, good days, bad days, but had not yet lost anywhere near what I have been able to make in my IRA account. Not as well as I would have liked or expected, but considered the losses the cost of opening a new business, and education. Looking at it like that, it has been a bargain, and if I hadn't done it, I would always have wondered "what if".

Enough background. Fast forward to December 23. ITSC was in play. I had decided that it was time to take it up a notch, increase my shares, but I had been struggling with it a bit. 

ITCI had beaten earnings, and had several analysts upgrades. It started with an opening range breakup, and I got in with more shares than what I had been doing. Not a lot more, and still probably would be considered small by more experienced traders. The stock then shot down like a rock, and I saw my unrealized drop to negative $800, which was way more than I was willing to lose. I did the classic, psychological reaction that we have all been told about. First I completely locked up, panicked, and sold everything, even as it was starting to reverse. It then took off, and hardly even did as much as a pullback, all the way up to what I remember as something like a $6 climb. Because of my intervention, I turned what should have been a $4000 plus gain into an $800 loss. I felt like someone had hit me in the face with a 2 by 4. In the words of that great American philosopher, Mike Tyson, "Everyone has a plan, until you get hit in the face".

I then watched it drop back nearly to where I had gotten out, and then run back up to a double top. But I was still in no condition to get back in. I was petrified.

Until.....

By the afternoon, I had gathered my senses, and followed the price action of this stock that had beaten me so badly. So the next time it dropped and started to reverse, I had decided that it was time to get my money back. Most of you probably know where this is going. I decided to get in with smaller size, and as it went in my favor, I would add size. Sounds like a plan, but ITSC still had other ideas. Then it took another leg down. Hey, no problem, just add, and you've got a better entry. Then came a big dump down. I can't even explain what had taken me over, but I added again. After watching it continue to grind down, I was eventually forced to come to terms with the fact that I had just managed to double my losses, and by the time I got out of the nightmare that I had created, I was down $1600 for the day, December 23, 2 days before Christmas, ITCI. I will never forget it.

The "Hulk day" that could never happen to me, had happened, and I honestly had no idea what happened. I'm fortunate that I was able to absorb the loss without having to give up trading altogether. My strong belief is that no matter how many times you get knocked down, the only thing that matters is how you get back up. I was surprised how quickly I was able to recover, and a month later, things are actually starting to "click". I actually feel like I am developing a process that I can execute, and one day, have the consistency that I need, and I'm working very hard with dealing with the fear. Also, please know that during every moment, I was completely aware of the fact that I had done this to myself. I was to blame. Not ITSC, or the market. But, as some time has passed, I now know that I did learn a very valuable lesson that day, and I now follow my rules without question. Mechanical stops 100%.

I decided to share this in the hope that it will help others. I had thrown out all my rules. I was sick of seeing trades hit my stop, and then turn and burn. I was going to force the market to act how I wanted it to act, and it cost me more than just money. If it can happen to me, it just might happen to you. If nothing else, if you should happen to take a bigger loss than you might have been prepared to take, is that you will keep this in mind when you think about what happens next.

 

Edited February 17, 2020 by dmiles
Corrected stock ticker

[Bryce Rizzuto 1]

Thank you for sharing.    I've been trading in SIM for about a month now.    The first weeks were so painful as I saw red day after red day.    Even when I began to make some smart moves I sabotaged myself by not following my rules.     Whether it was not setting mechanical stops, "hoping" the price/action would turn around in my favor, or simply not stopping for the day when I'd reached a target (either positive or negative).     The last week or two I've followed my rules and focused on discipline, discipline, discipline and am finding consistent success.      Still a long way to go in the learning curve, but the importance of rules and discipline, as Andrew and others have pointed out, is paramount.     What a journey!   🙂

[dmiles 19]

21 hours ago, Bryce Rizzuto said:

Thank you for sharing.    I've been trading in SIM for about a month now.    The first weeks were so painful as I saw red day after red day.    Even when I began to make some smart moves I sabotaged myself by not following my rules.     Whether it was not setting mechanical stops, "hoping" the price/action would turn around in my favor, or simply not stopping for the day when I'd reached a target (either positive or negative).     The last week or two I've followed my rules and focused on discipline, discipline, discipline and am finding consistent success.      Still a long way to go in the learning curve, but the importance of rules and discipline, as Andrew and others have pointed out, is paramount.     What a journey!   🙂

Sounds like you are well on your way! I have to admit, I fooled myself into thinking I was ready to go live by making the decision to stop "keeping it real" in sim, and was able to produce $2K green days regularly in sim, but it was not practical to operate that way in a real account. Wish I would have had the discipline to do what I knew deep down what I should have been doing all along. Would have probably saved my account from taking such a beating had I done that.

[Brendon 146]

Never let the trade go past your stop. Ever. The moment you do, you are not a trader. Widen your stops a little and take smaller size if you must. 

[dmiles 19]

On 1/30/2020 at 7:50 PM, Brendon said:

Never let the trade go past your stop. Ever. The moment you do, you are not a trader. Widen your stops a little and take smaller size if you must. 

Absolutely true. I just wanted to share the day that I discovered this "hulk mode" that I had heard so much about, and more importantly, that it actually happened to me, and at one of the worst possible times it could possibly happen. 

[Mike B 625]

On 1/28/2020 at 5:39 PM, dmiles said:

My strong belief is that no matter how many times you get knocked down, the only thing that matters is how you get back up.

Could not say it better myself. 

[MikeJay 3]

Thanks you so much for sharing.  I'm starting off brand new and am working in SIM, but I am finding myself taking action or inaction I THOUGHT there's no way I would.   Stress definitely creates tunnel vision and hyper sensitizes your emotions.  Without practice in SIM and small share/account live, I can see now how people blow up.   Thanks for sharing.

Trade safe...

MikeJay

[dmiles 19]

4 hours ago, MikeJay said:

Thanks you so much for sharing.  I'm starting off brand new and am working in SIM, but I am finding myself taking action or inaction I THOUGHT there's no way I would.   Stress definitely creates tunnel vision and hyper sensitizes your emotions.  Without practice in SIM and small share/account live, I can see now how people blow up.   Thanks for sharing.

Trade safe...

MikeJay

No problem Mike, I hope it helps you, and others along the way. You are absolutely correct, we do things under the pressure of the moment that we normally would never do, and you are spot on regarding the tunnel vision. It looks to me like you are well on your way, my best advise would be take your time, and use all the resources available at this great community.

[Skyhigh11 1]

Thanks for sharing your story... I am wondering what precise actions you took to "get back up".  I've been live now for a couple of weeks and have done everything all the seasoned traders tell you not to do (must be a rite of passage)... premarket action, trade in the first 1-5 min, overtrade, etc.  Now that I have made all those errors (which actually seems to have some value), I feel a little lost on where to focus my attention for improvement.  

[dmiles 19]

11 minutes ago, Skyhigh11 said:

Thanks for sharing your story... I am wondering what precise actions you took to "get back up".  I've been live now for a couple of weeks and have done everything all the seasoned traders tell you not to do (must be a rite of passage)... premarket action, trade in the first 1-5 min, overtrade, etc.  Now that I have made all those errors (which actually seems to have some value), I feel a little lost on where to focus my attention for improvement.  

Well, like I mentioned, it was the day before Christmas eve, and although I knew I needed to share what happened with my wife, I didn't think it would be fair to unload this on her at Christmas time. This gave me a chance to reflect on the whole ordeal, and put it in to some kind of perspective. That perspective comes from many of the fine folks in this community. I consider this a business, and as such, requires some investment. When you look at the investment that other forms of business require, this has been quite a bargain. You are spot on when you call these things that we do , which we are are constantly warned not to do, a rite of passage. I just had to look at it as a valuable lesson learned, and decide whether I was ready to move on, or not. I decided to continue my pursuit, as the only other option I see is spending the rest of my days wondering "what if".

I also must confess that I have great support "at home" as my wife was not anywhere near as concerned as I thought she would be. She reminded me that I often bring in twice what I lost that day in one day of swing trading, but have also often had days where I lost more than that swing trading as well, and pretty much take it in stride. It seems that in my state of panic, I had narrowed my focus, and didn't even realize it. She did mention that this would only be a waste if I didn't learn from it. That, my friend, made a huge difference on how I was able to "get back up".

So, mechanical stops, and making trading in general as mechanical as possible is a requirement for me, for now. Some can use mental stops, but I have shown that at least for now, I can not. I highly recommend the work of Mark Douglas. He is no longer with us, but his work lives on, and when it comes to getting a grip on the psychological issues we face, his work is the best there is. Take it slow. The only thing I have been able to do quickly in this business is lose money. Try to think about where you want to be in 6 months, a year, or 2 years down the road. I knew that if I kept going the way I was going, I would be out of business in 6 months to a year.

I went back to paper trading, and even combining paper trading with live trades. I am much more aware of my weaknesses, and what it feels like when they come around. Nowhere near perfect, or even where I would like to be, but I can see progress. I now focus on the process, and oh yea, went back to my smaller share sizes. It makes a huge difference. I've been told that it could easily take 2 years for me to become consistently profitable. 2 years is the blink of an eye in the grand scheme of things. I figure if I take it slow, at least I'll still be around in 2 years. Don't be shy, use this community. There are highly skilled people here who really want to help. 

[Hansabraun 7]

Thank you very much for sharing your experience so openly and specifically .  I’m still in sim but getting close to going live.  For myself, I have found that making money trading is easy.  Making money consistently, trading with tight stops, is very very difficult . And if I don’t use real stops, I’m only time away from hulking out from a big loss.  I know risk control is simply the only way to make it long term in trading.  Because without it, you’re really just gambling.  Your openness and willingness to help others by sharing is so impressive and is also refreshingly normal here at BBT.  I’m so glad to have found this community and I really benefitted from what you shared. Thanks again.

[dmiles 19]

23 hours ago, Hansabraun said:

Thank you very much for sharing your experience so openly and specifically .  I’m still in sim but getting close to going live.  For myself, I have found that making money trading is easy.  Making money consistently, trading with tight stops, is very very difficult . And if I don’t use real stops, I’m only time away from hulking out from a big loss.  I know risk control is simply the only way to make it long term in trading.  Because without it, you’re really just gambling.  Your openness and willingness to help others by sharing is so impressive and is also refreshingly normal here at BBT.  I’m so glad to have found this community and I really benefitted from what you shared. Thanks again.

I've been told that I might have gone into more detail than needed. I wanted to demonstrate at least in real life, I've been able to have some measure of success, and also at times perform pretty well at a difficult job, under some extreme pressure. I've had experience trading in the market, I "did my homework" and yet, that day came. I like the way you put it "your openness and willing to help others is refreshingly normal here at BBT".  So true.

Thanks for letting me know that you found this helpful. If that bigger than expected loss ever comes around, I hope this at least gets some consideration as you stop and try to figure out what happens next. 

[Atomspapa 2]

Thank you for sharing! I read somewhere that within DAS you can set mechanical stops fro all trades. A floor for your loss if you will. Withing the program do you know where I can set this for all trades? 

[Michael McCausland 6]

I had a similar experience.  I have gone back to Sim until I get comfortable with a real plan, and know how to use the tools that I have.

[Brendon 146]

7 minutes ago, Michael McCausland said:

I had a similar experience.  I have gone back to Sim until I get comfortable with a real plan, and know how to use the tools that I have.

Everyone blows up a little, it's a Rite of Accession, think Klingon pain sticks. Use Kyle's keys to max your loss per trade. Of course you can always stop out earlier if the trade isn't doing what you thought it would. Then free ball it like Andrew once you get used to stopping out.