My crushing loss & how I turned it around
In 1998, I began trading smack in the middle of one of the hottest tech bubbles of all-time. Some might call that good luck. I call it a crash course in how to trade and how not to trade. Over the next couple months, I watched the Nasdaq go from 3,000 to 5,000… then crash to 1,000. And, I wasn't fully ready for it. At one point early in my trading career…I was minutes away from losing 200,000k 8 months in… I was neck deep in volatile stocks like PMCS, AMCC, and GMSU (all defunct now). The closing bell had rung… 4:15 news breaks, I honestly can't remember what the news was. Suddenly, my entire account is down 40k. Not having a plan, I buy more. "Buy the dip", that's what the young guns say, right? Now, I'm down 60k. | |
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This is all happening over the span of half an hour… My parents only made about 60k per year in their salary as hairdressers. No way am I calling them to tell this fiasco. I'm crying my eyes out. I stumble back to my apartment and pass out. Next morning, I'm down a whopping 90k. I lost 30k while I snoozed. Opening bell hit, I sold everything. Total loss = 80,000. By the end of the day, if I had held, I'd have been down 200,000+. Fortunately, a chunk of that 80k loss was profits from prior month trading. Else, I'd have been bankrupt again, and you likely would not be reading this email. (I'd be back DJ-ing bar mitzvahs like I used to as a young Red Dog) | |
We had 200 traders in our firm speculating on stuff like Pets.com, early Amazon during the bubble… everyone was making money. Until they weren't. One week in 2001, the bubble burst… by 2002, our firm shrunk to just 30 traders as many slipped into different careers. It was around this time I realized I had no idea what I was doing. I had no plan. No real strategy. I was trading based on emotions and "gut" instinct. | |
That's why today there's no bull here. None allowed. At my trading company, T3 Live (which I co-founded in 2007), we have traders online most of the trading day talking about wins and losses in real-time. All follow a set plan. It's the transparency I wish I had when I started. Look, I'm two blocks down from the New York Stock Exchange. I'm sometimes on the floor myself. Maybe I'm talking to Fox Business, The New York Times, CNBC, TD Ameritrade, Investors Business Daily… you name it. Jim Cramer has hit me up about "Hey, what do you think about this bull market… what about Facebook?" | |
I'm there at the heart of it all. The teeth of the beast. You don't think I don't hear all the 'behind closed door' crap that goes on around Wall Street? It happens everywhere, everyday. Which is why I set out to create the best place on the internet to learn about trading without the fluff and the deception. If you want to see what I'm trading this week, here it is, | |
Scott Redler Editor of Power Plays & Co-Founder of T3 Live | |
Scott's Disclosures as of 6/12/2024 | |
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