Chapters
Quick summary
NVIDIA was running every day, and after something works enough times your brain stops thinking this has been working and starts thinking this cannot stop working. She was up $55,000 within minutes and held, because she had never decided what good looked like. It turned, she bought more on the way down, and the position went to zero.
Three rules came out of it. Size — no more than about 10% of the account in one trade. , decided before you enter. And knowing when not to trade at all: sick, distracted, busy, driving — close the laptop. You cannot lose money you did not put in the market.
Lesson 5 of 5
The morning I did nothing
She was up fifty-five thousand dollars in minutes. She did nothing, and it cost her three hundred thousand.
Up fifty-five thousand dollars in minutes. What she did next cost her three hundred thousand.
Words she uses
Falling knife
Buying more of something on the way down, hoping to average your way out of a loss.
Like this: Digging a deeper hole to get yourself out of a hole.
Position size
How much of your whole account you allow any one trade to be.
Like this: How much of the weekly food shop you would put on one lottery ticket. The answer is not all of it.
A plan for the win
Deciding where you will take your profit BEFORE you are in the trade.
Like this: Deciding what the bonus is for before it lands — otherwise it just disappears.
What to take away
- Excitement and euphoria both point one direction: greed.
- Rule one — size. No more than about 10% of the account in one trade.
- Rule two — a plan for the win, decided before you enter.
- Rule three — knowing when not to trade at all. You cannot lose money you did not risk.
The morning she did nothing
This is her NVIDIA trade, minute by minute, and you are holding it. Hit SELL whenever you want. You will see what happened next.
Check yourself
Answer all of them to unlock the next one. Getting one wrong is fine — the explanation is the point.
1She was up $55,000 within minutes and did not close. What does she name as the cause?
Her own diagnosis. The money high is real, and it points one direction. That is why the plan has to exist before you are in it.
2As it dropped she bought more calls on the way down. What is that called?
Catching a . She could have taken a paper cut. Instead, in her words, a hole became a crater.
3Which of these is NOT one of her three rules?
The three are size, a plan for the win, and knowing when not to trade. Nothing obliges you to be in the market today.
4You are ill, distracted, and it has been a bad day. What is the move?
Her favourite of the three rules. Sick, off, busy, driving, not focused — close the laptop. You cannot lose money if you are not in the market.
0 of 4 answered
Answer the questions above to carry on.
