A time of self reflection, ibankbitcoin's past as a trader. Part 1
Last week when bitcoin dropped to $160, many traders lost their shirts or quit. I empathize with you all. I said I would go over a few short stories of my past. I have personally lost fortunes trading the stock/futures market, multiple times. I would not be the person I am today if I hadn't paid the most expensive tuition of all.
First, I can tell you I am no different than any one of you. I understand the feeling of losing it all, it hurts so much that I've adapted and become more disciplined as a trader. So here is my first bust of the series.
I first started trading during the 2008 crash. The young and naïve version of ibankbitcoins bought his first share of a stock, read up on technical analysis, and visited forums and blogs to search up “good” trade ideas (for the record, my blog is legit).
With a gain of 30% in 6 month, I was confident as fuck (the usage of language here is to describe my sentiment and confidence at the time). I bought and shorted stocks like nobody’s business, increased my leverage, trading in and out all the time. I was buying up FAZ (3x leverage of the inverse financial sector index). General market was tumbling, so shorting the bounces was the way to go. It was good times until 2009 march, when market bottomed.
My account went bust in less than a month shorting an unprecedented rally in the finance sector. I smoked too much hopium and was too prideful. What is interesting about this bust is this: While I was holding on to shorts during market rally, I knew I was wrong and I should get out. But, I didn’t. I was too stubborn to admit my paper losses; I became a holder of my stock rather than a trader. Every day I hoped that market would fall back down so I can exit. I did exactly what Jesse Livermore described. God, I wish I had read his book the first time around.
"When the market goes against you, you hope that every day will be the last day – and you lose more than you should had you not listened to hope. And when the market goes your way, you become fearful that the next day will take away your profit and you get out – too soon. The successful trader has to fight these two deep-seated instincts." --J.Livermore
The pain was so great because I lost an unfathomable amount of money for my age. Only when the pain is great do I seek help and change. Because my first bust, I had learned to put my pride aside and stop revenge trading.
So, what do you guys think? Continue the series of ibankbitcoin’s busts? The site is ad and promo free and I intend to keep it that way. If you find my blog helpful, consider supporting the site by creating a new account with my referral at bitfinex or okcoin.
Thanks to Frosty from twitter for proof reading this. @sonarous