Read about the whole hulabaloo surrounding a video that a young trader made after he made a poor stock transaction.
You haven’t seen someone at the end of his rope until you’ve seen someone who’s blown his money on the gambling table. We’re not talking about the casino here though, but the stock market!
Somehow I caught wind of a You Tube video that presents a massive rant by a young guy who reminded me somewhat of my bro-in-law in appearance and investment philosophy 😉 . Of course, I haven’t had the experience of witnessing my brother (as I would call my in-law) go into a major meltdown as of yet.
The video is a demonstration of what may happen to those of us who are overextended in the stock market or those who day trade, deal with complicated financial “investments” that are hard to understand, care about timing the market or decide to take enormous amounts of risk. When the market decides to disagree with you, it can treat you like its most obnoxious enemy; it is unforgiving, nasty, a bottomless pit.
I can’t help but feel bad for this dude. The description on the video: “the stock market ruined my life, I suck at trading, trader flips out, day trading is stupid, I hate life.”
Please note that this video is NSFW (aka “not safe for work” because of raw language) and has lots of slow moments, primarily at the opening. Also, the language is extreme to the point that I debated on whether to publish or mention this here but my spouse thought it was too interesting to pass up. It’s terrible to find amusement in times like this, but some of the comments on You Tube are outrageous while putting things in context (is this guy on margin? did he just buy $648,000 in small cap futures contracts last Friday?). If anything, this offers lessons and reminders to all of us investors who decide to participate in the stock market — you don’t want to wake up one morning and find yourself in his shoes.
Voice starts coming in at 00:50, escalating into some scary behavior. AGAIN, this has expletives and adult language — please don’t watch if you are easily offended or sensitive to angry outbursts.
Guy Reacts While Watching His “Investments” Tank
Some comments from sympathetic commentators:
Sorry to see this, have been in similar position. Made $50k profit in a few months, then watched it disappear. I’m in my early 20s and consider it a learning experience. Feels awful for a few weeks, but the pain goes away and you will recover from this. It can only get better from here bud, think of it that way 🙂 .
The futures market is a zero sum-game. What this boils down to is that the vast majority of traders lose money while a small minority profits a lot.
Unlike what some folks are suggesting, I strongly discourage this guy to continue down this path.
Don’t let this happen to you. Go with index funds. Create a balanced portfolio with diversified mutual funds. Practice reasonable asset allocation. This guy’s experience can very well serve as a warning for us all. And if you’re still depressed, maybe you can try the tips on this post.
Unfortunately, I can’t help lift your spirits on this one since I believe the market will probably go even lower in the days / months ahead, establish a bottom, pick up then retest the bottom. Who knows how it’ll all play out or when it’ll all clear up, though clear up it will; it’ll just test your patience a bit longer than you’d like.
Copyright © 2008 The Digerati Life. All Rights Reserved.
{ 16 comments… read them below or add one }
Ouch. That’s a rather cringe-worthy situation.
When you’re that young (like me) there’s really no urgency about beating the market. I mean, sure if you have a good job I could see playing with some cash on the side and hoping to make it big. But day trading for your living? Get a job at an investment firm instead and do it with other peoples’ money. Same thrills, high salary, and it’s not your money…
I can understand why older people would want to play the market, even though it’s more dangerous for them. They have less time for the nice index progress.
The futures market is an entirely different animal and serves a different purpose than index or mutual funds.
Early Retirement Extreme… well but isn’t the point to make money and keep it? Then I would suggest doing it with less complicated investments that will give you a better chance of making some long term gains. Also, the video gave me the impression that the guy placed his entire life’s savings in this trade. Straight from his mouth!
Let us know what your goal is with playing with futures. My point is that there are alternatives to this that are hopefully “safer”. But I’d love to hear more about your stance and opinion on futures.
From the guy’s blog:
About 40k in 2 days….gone. Speechless. One bad trade, is all it takes. 2 and a half years of trading thrown down the drain on 1 trade.
@ SVB – I’m not touching futures with a ten foot pole. Much too fast and technical for me. Besides trading is a job for professionals i.e. full time. They are not necessarily bad for those who know what they are doing and traders do fulfill a purpose of providing liquidity and transferring risk.
If you happen to be diversified into a commodity fund (I’m not), you might own futures – as far as I know some of them use a fraction of their principal to leverage futures to track the indices rather than committing 100% unlevered.
I didn’t watch the video yet, but putting 100% in one trade is reckless position management. Position management is part and parcel of trading 101. Even the simplest strategies would have avoided such a loss.
@ERR — true, if you are a professional who spent the time studying and perfecting your strategies in the realm of high-risk/high-return finance, then you’d be qualified to do this sort of thing. But the average investor should avoid it at all costs and should probably look into more straightforward ways to invest.
Unfortunately, most people just don’t consider themselves “average”.
That’s why this happens.
All the more reason to ring the register on the way up, too. So many folks leave profits on the table in hopes of more profits that they eventually lose them all – particularly in this market.
I had a freind that worked in Futures for a long time and had this to say:
If you don’t know what you are doing you can lose a lot of money, if you DO know what to do, you can lose it a lot slower!
I am not sure how much money he actually lost, but I would feel horrible if that happened to me. Thankfully we are able to entertain ourselves at the expense of somebody else.
This guy clearly doesn’t have the emotional discipline to be in the stock market. The worst part is that he seems to blame others for his losses, not himself. I know what it’s like to lose lots of money in the stock market with one quick swipe, but I never freaked out the way this guy did.
When I lost a huge chunk of my money, I sold my position, accepted my losses and took a week off from investing. That week was hard on me, but ultimately I learned alot from it and came back with a clear mind looking forward to investing in the stock market again.
I forwarded this to all my trader friends. They’re laughing their tails off! Or maybe they’re crying … it’s kind of hard to tell today …
That was a great build-up, so I was disappointed to click on the video and receive a message stating, “We’re sorry, this video is no longer available.”
-1MansMoney
1MansMoney — thanks for letting me know that the video has disappeared from You Tube (due to strong language).
Well, I updated my post to fix it and it should work now! Also, I’ve included the link to the actual video from the original source (High Probability Trading site).You can make your way over there and check out what else the High Probability Trading site has to offer.
Update: This site and video are no longer in service, I believe!
I am really sad to read this article because today I lost very much… 🙁 ;(
day traders lose about 90% of the time, meaning there is usually a 10% chance that you will make money.
This is the downside to get rich quick!
That is tough. I wounder what happened. Maybe he wasn’t position sizing or something. Did he have a system for trading?
I would like to figure out what he did.
I haven’t traded the Futures market before but I assume it is just like the stock market.
If perhaps I needed to give some thing up in life it would not be my video game system.