As weird as it may sound from a logical perspective, making money can actually be one of the worst things to happen to someone new to the market. We sit down and talk with chat room member Dave (“TracknPennies”) and he discusses some very insightful aspects of his journey… including of course how his early success turned out to be the “worst thing that could happen: he made $3,100”. Why was this the case and where did his journey go from here? Sit back and enjoy.
Notes:
Dave’s introduction to the market came back while he was in high school in the 80s. About 15 years later he started to get re-interested and decided to start doing some research.
Like many others, he didn’t want to outlay too much capital and this led him to penny stocks. The message boards and huge gains were extremely appealing considering the small amount of capital required.
After having a few small wins and losses, Dave made a really good profit and now thought he had ‘figured it out.’ These thoughts always lead to prematurely sizing up. After having mixed success trading shorter term time frames, he started looking into the companies ‘stories’ and now swing trading them.
On more than one occasion Dave was up $30,000 in unrealized profit but more often than not would end up only walking away with $5,000. The power of greed is something many people underestimate.
Eventually after watching huge gains diminish to small gains or even losses, Dave decided that he was going to take some time off from the market. When he returned, he realized that he needed to invest in his education.
The penny stock market eventually went lifeless and that is when he decided to learn how to use his technical analysis to trade options like many other traders in the community. Dave realizes that his risk vs. reward is not where it should be yet and that is his primary focus for 2016.
Quotes:
“When the economy took a dump the money wasn’t coming in like it had been. I had to start looking for other sources of income.” tweet this quote
“The worst thing that could happen happened. I made $3100 in an hour. So now I’m a professional.” tweet this quote
“The chart was screaming sell but I was drinking the Kool-Aid. I was up $30,000 and I still didn’t sell.” tweet this quote
“You can lead a man to knowledge but you can’t make him think.” tweet this quote
