This is a sad but important blog post from newstudent who broke my rules and paid the price.
Shame on some of you for thinking that you’re gonna win every time or that you’ll somehow do great even when you break rules I’ve worked my ass off learning and refining for over 14 years.
I’m not perfect at all — if you look at all my trades at http://profit.ly/user/timothysykes you’d see I lose roughly 30% of the time.
Heck look over to the right side of this website and you’ll see I haven’t made much money the first week of May 2013 as I was over-trading and got caught with position sizes that were too bid when a certain earnings winner, BCOV, didn’t act the way I thought it would.
And yet despite a few thousand dollars in losses, I still made $4,000+ for the week because of this one trade where I made $6,000+ which wiped out all my small losses from the week and more.
That’s the key to my success and what I teach in these 7 free video lessons — you have to cut losses quickly when a trade isn’t acting right to prevent giant losses that affect your confidence and total account value.
My newstudent has now learned this important rule firsthand and sadly, actual losses are what it takes for the value of this lesson to be driven home.
At least try to learn from this guy’s mistake:
Tim has many rules which he often stresses his students to follow, last week I broke them. My reason for writing this post is to STOP you from doing the same.
I only had a $965 account and had tried to follow Tim’s rules and teachings to the letter on every trade, but as a newbie some profited and some didn’t. On the morning of Wednesday 10th April I had just closed a long position on the stock $PSON making $32 before commissions and I was pretty pleased with making 10% on my account over the couple of weeks.
But me still thinking the stock could go further I bought in again.
Tim often mentions how he watches every tick and trade when he has a position open because it allows him to feel comfortable and gives him a quick escape if things go south. This is where I went wrong. I left my desk for 3 hours and the price fell off of a cliff.
To make a long story short I lost $242 which was about 25% of my account.
During thewebinar on Tuesday evening special guest Tom McCarthy said that a good trader should feel like they should have held longer and a poor one feels like they should get out sooner. In this situation I was the poor trader.
I have learned many valuable lessons from this mistake, and it has reaffirmed my need to learn Tim’s strategy before I continue trading.