The Time I Burned $14,000 and What I Learned

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Back in 2010, I decided that I wanted to try my hand at trading stocks. This was just after the subprime mortgage crisis, when the market had began a very strong recovery after a huge recession. At that time, no matter what you put your money in, you were basically guaranteed to make a great return.

After tripling my money in under 5 years I began looking for ways to grow even faster. One day, I stumbled on day trading videos on YouTube, and was instantly hooked, watching while traders made large amounts in short periods. It seemed like a perfect fit for my lifestyle, allowing me to work when and where I wanted while I traveled.

I began studying stock charts because I wanted to focus on pattern day trading. I started relatively small but moved up my position sizes quickly, this meant starting at $1,000-$5,000 per trade, then moving up to $15,000-$20,000 per trade.

Even though I was losing money overall, I never wanted to give up. I figured if I kept fighting, I’d eventually figure it all out. Every once in a while I would make a great trade, erasing a few thousand dollars of my mounting losses. After a while I actually got pretty close to breaking even, before it all went bad, extremely fast.

After a few good trades in a row, I went big on a short sell (betting a stock price will fall) that I felt confident in at the time. At first, the trade was going in my direction, but not long after, it began going against me quickly. This was a margin-trade, meaning that I borrowed money from my stock broker to make the trade. The brokerage company charges interest on this loan so this increased my already substantial losses. I wanted to wait it out, hoping that the trade would turn around, but after days and days of waiting, I decided to cut my losses so I didn’t lose all of my savings.

On this trade alone I lost $8,000. When combined with my other losses, I was down $14,000 USD. I was crushed. I constantly was thinking about all of the things I could have bought with the money. With my lifestyle, I could have easily supported myself for over a year with what I lost in a couple months. I wanted to puke.

Conclusion

As time passed, I started to slowly recover, making money in other ways. Even after losing a substantial part of my savings, my lifestyle didn’t change in the slightest, and actually improved. This was because I got more focused on my blogging, which led to many fantastic opportunities, which you can read about in other articles.

What this experience really taught me was that we shouldn’t allow ourselves to get attached to anything. One constant in life is that everything will always change.

We can’t control this.

What we can control is how we react when these changes and losses occur. What’s important is being at peace with having nothing. True fulfillment in life only comes from within. Nothing outside of ourselves will give us real happiness. All that really matters happens between your ears. The moral of the story, is to prioritize personal growth experiences, which keep life exciting and fulfilling, and to not to let ourselves get attached to things that will one day disappear.

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