He Told His Parents We Were a Scam | STR 083

This person is one mentally tough cookie. Our guest, David ("David from Columbus" in the chat room), took quite the tough-love-beating during his first few months as a member of the community. He was doing many things that we tried to warn him about, but he was... stubborn. To his credit, and why I respect him so much, he took the tough love like it was meant to be taken and factored it into his journey in an appropriate fashion. David is a smart guy, but like many, he's got some great battle stories already... which of course he shares with us! Notes: David’s introduction to the market was when he was 17 via his employers who made a majority of their income from trading and investing. They primarily focused on fundamental analysis but he felt like this was a lot of research work. Even though David was relatively young, he recognized the opportunity of being a contrarian and would buy strong pull backs and sell strong rally’s. He did not have any concept of risk management at this time and would just wait until he made his fixed profit target, one hundred dollars. Unfortunately, buying the dip does not always work. While he avoided one big drop by getting out at his fixed target his next trade was him maxing out his account while averaging down for months on an oil ticker. The interesting psychological point is that regardless of the big drawdown to his account, David was very sure of his position and the fact that it would bounce. The worst about about all of these practices is the fact that it is engrained in David’s head that he can always buy the dip and sell calls against it and make money. After some reflection on this, he realizes that if just one of the companies he was trading went under he would have lost his entire retirement account. This opened his eyes to risk management. David wanted to day trade to avoid the risk of gap ups or downs. After having a long winning streak day trading, David suffered a large loss that wiped away 3 month’s worth of gains. He recognized that he needed to learn from a professional in regards to risk management. He joined Claytrader University and is paper trading the strategies taught in the program. Perfect practice makes perfect. Quotes: “I was going to go against the trend and buy when people were selling and sell when people were buying until I made $100.” tweet this quote “It went from 30 to 20 bucks. So I kept buying and buying and averaging down until I was down around $3,000.” tweet this quote “I was just thinking ‘wow this cannot go any lower.’ I also learned about covered calls and sold against my positions to generate income.” tweet this quote “I first started with 50 shares and then moved up to 100 shares. Then in August I built into a position and lost $1,650 in 30 minutes.” tweet this quote “Going into the trade plan with a real good plan and has a high probability of success is really important.” tweet this quote Links: Video: How To Average Down Video: All Wins Are NOT Created Equal Article: How My Rule Break Spanked Me For A $1500 Loss