My Biggest Trading Mistake To-Date and What I Learned

Anything that can happen, will happen, and at exactly the worst moment.

Picture this. It was two days before I was to get married to the most wonderful woman in the world. I should have been excited and focused on preparing for that big day but instead, I was cycling through feelings of fear, anxiety, regret, powerlessness, and ultimately depression.

It was 8:30 am on a Thursday and my future wife and I were preparing to leave for the courthouse so we could get our marriage license ahead of our wedding on Saturday. She was getting ready and bubbling with love, excitement, and anticipation while I was staring at my cell phone lost in a sea of despair.

I wanted so badly to be present at that moment but just could tear myself away from what was happening. I should have been prepared for this but I wasn't.

All I could do was hope that the pain would get bad enough that I would eventually sell my position so I could get back to what really mattered in my life.

You see I had been working for years to master the art of trading stocks. I wanted to become a legendary trader and help others achieve what I had come to know as the single most important skill in the world for achieving lasting wealth, investing in stocks.

Yet there I was after 11 years of learning how to trade stocks, after starting my own hedge fund, and after creating and selling courses teaching others what I have come to know, and still, I was breaking fundamental rules for trading.

And to make matters worse, I had frozen. I was sitting on deep losses not only in my account but also accounts of people who trusted me with their money.

I thought. I had gotten sloppy and lacked discipline. I no longer trusted myself enough to take the actions I knew I needed to take to protect myself and my customers.

Even worse, I was letting this circumstance steal away precious moments from my life that I will never get back.

For the most part, I missed that entire day staring and quite literally morning the losses that had mounted in those accounts. That day turned out to be one of the most costly mistakes I have ever made in the stock market.

I turned a $60K gain into a nearly $250K loss all because I refused to take a loss.

It was one of my largest single-day drawdowns to date (15% of my accounts at the time) and was completely avoidable.

Even though I considered myself to be an expert in my field with multiple triple-digit gaining years under my belt and after being up over 100% for the year despite the S&P being down over 20%, I was still capable of doing serious damage to myself.

I needed to make a change and I needed to do it straight away. I needed to cut my losses and get back to the basics if I was going to survive this and ultimately continue to learn and grow from it.

The next day, I cut the trade immediately and proceeded to have the most wonderful wedding and one of the best times of my life where I was completely present and experiencing every moment as if it were my last.

You need safeguards to execute for you in the event you are unable.

Now, I realize that my wrongdoing was not my plan. I had a plan, I just wasn't in the right space for handling the decision-making that needed to take place on that day. I was unable to execute it.

Looking back on this experience now it is apparent to me that you not only need a clearly defined plan of action but you must also have a second layer of protection if you are unable to execute.

The reality is that no matter how good we get at something because we are human, we are susceptible to making mistakes.

From now on, I set automatic stops. It doesn't matter what kind of trade it is.

Having automatic stops will guard against the possibility that you're not in a position to execute the stop either mentally or physically.

The result will be that you are protected at all times no matter what.

While the mistake did cost me a lot of money, I also lost priceless time with my wife that I will never get back.

I am sharing this with you because after this experience I realized that there is more to life than trading and making money and I am hoping that you will too.

Set automatic stops for every trade right away. This will save you a lot of pain.

Also, remember that the market is full of an infinite number of opportunities and you're not missing anything. If you get stopped from this trade, there will be another.