Friday, July 11, 2008

The Stock Market Ruined My Life


I felt it was time to bring back the video.


Stock Futures Trader losses it all and flips out - Watch more NSFW

For those that didn't see the video when it originally aired January 22, 2008, I lost over 30k holding a trade over the weekend being long the stock Futures indices. I was overleveraged, but I never thought the market would go limit offer(Dow Futures down 650pts) with the US markets closed on Monday in observation of Martin Luther King day. I sold my long before the market opened due to a potential margin call that would have liquidated everything. On Tuesday, the Fed did a surprise interest rate cut, and the market popped 500pts. Here is one of the posts from January.

The Dow dropped close to 1000pts in 3 trading days.



The FRE and FNM news is shocking.
Treasury Secretary Henry Paulson is insisting that any potential government rescue plan not benefit the companies' shareholders, according to people familiar with the matter.

One option would have the government buy a chunk of Fannie and Freddie's preferred stock with terms that dilute the equity of common shareholders.(WSJ online July 12,2008)

From The HousingPanic Blog-IndyMac Bank, F.S.B., Pasadena, CA, was closed today by the Office of Thrift Supervision. The Federal Deposit Insurance Corporation (FDIC) was named conservator.

Check out this video from last year of FRE CEO, back when the stock was at 60 and the Dow was at 13,500.

11 comments:

Anonymous said...

Man, I remember when you first put that on your page. There was no day like that sunday night down 650. I couldn't sleep and I couldn't believe it. I am a young guy that trades a lot (but not futures), and that would be devastating. I know its easy for me to look back on that and say that really sucks, but to even face those demons would be tough. I applaude you for putting the video back up.

Anonymous said...

congrats on 'back in the saddle again' attitude, I know you have it in you. Now, when you think you can tell market what to do and decide to go for the gold please remember this little video. God knows I had been there too many times myself.

Stewie on 10:26 AM said...

hi hpt. i respect you for reshowing this video. i am sure it brings back a lot of painful memories. I cannot tell you how many times i had similar conversations with myself. These chock in a trader's life are part of the growing process and these painful experiences will help remind you that this is game is a game of ONE THING and one thing only regardless of what system you use to trade: This is a game of DISCIPLINE. pure and simple. How many times did you see a profit turn into am loss? how many times did you opt to 'ride out' a small loss only to watch it escalate into the depth of hell? how many times did you see a huge profit turn into a small one? It all comes back to DISCIPLINE! It took me years to understand this simple concept. Keep watching this video and make it send you back to the drawing board again and again until you find a system that uses disciplined loss management. REMEMBER: There's always tomorrow.

Bluedog on 7:15 PM said...

That video still gives me the chills. It is and will be a good war story for you. But you're a smart guy. You'll learn, move on, and bounce back. We have volatile times ahead of us so there will be plenty more opportunities to make that $$$ back.

BD

HPT on 7:39 PM said...

Stewie, its always come down to discipline and position size.

Blue, its a story I haven't really told many people in real life about, but half the internet trading community knows about it.

Dave on 7:25 AM said...

Hi HPT,
saw the video some months back from a link somewhere. Glad that you are back, and stronger !

jpm on 4:03 PM said...

HPT, your a good man to remind yourself/us of that painful period. I'll certainly never forget it. The trick is not repeating it. I've followed your blog well before your infamous blow-up, but I'd like to know how/if you re-capitalized yourself to get back to trading. Cheers.

Anonymous said...

when dealing with an entity that anything can happen at any time i am shure you will never risk having everything wiped out again. as stewie said, if we break our discipline the outcome can often be fatal.you have regrouped and this learning experience will make you a better trader. good luck

Scott on 2:16 PM said...

You're a brave man to post that deep look into your psyche. Since none of us can predict with certainty where the markets will go, it makes sense not to put yourself in a postion where you can get wiped out.
Take it slow and don't be in a hurry to make money. Tomorrow is another full of opportunities.

Anonymous said...

I was in the same boat as you and reacted the exact same way. Fortunately I had abrely enough cash to ride it out for another day. I still closed out for a 15k loss, but that which does not kill us can only make us stronger. I am still here battling it out everyday, a little poorer but definitely more the wiser. Have made back all of the losses from that debaucle and then some. It takes a big man to take the hit we took and bounce back. But it takes and even bigger man to pick himself up, dust himself off and start all over again knowing the insurmountable mountain you have to climb just to get back to even. I salute you for having the balls to leave that video up. We can all learn something from each others mistakes and we all have made our fair share I'm quite sure. Good looking out and will be seeing you in the markets.

Anonymous said...

I was in the same boat, but didnt act the same way. If you cant affroed to lose it all, put it in the bank...wait under the mattress these days
kiss goodbye 400k

risk management
hedging

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