Over the years, a lot of us have experienced our down moments in the market. Regardless of what you trade, every trader gets into a funk. A funk which can easily turn into a dark, expensive hole. You buy a stock; it drops; you feel the need to instantly buy another in order to make up the bags you were dealt on the first trade. This cycle can escalate. I am in this cycle.
Why write about this? Well… that is a good question. I am writing because I know very few people out there will. Ask any trader, look at social media, look at any message board. You will see the same stuff over and over. "I told you that stock would suck," or "I told you it was garbage." Then on the other side of things you get the "I just hit the lotto! We are launching." Blah blah blah. I will always keep it real, and I am honest about admitting to mistakes.
I assure you for every one of those call-outs, there are 99 more that simply eat shit. People do not want to post about it for fear of losing followers. For fear of being wrong. For fear of others thinking they are a bad trader. But the best post it all. Very few out there, but they keep it real. While I have very few followers on Twitter (and no other social media), I do regularly trade and the past 4 months have been an absolute nightmare. I am in such a deep hole and there is not enough liquidity in any of my plays for me to even get out of them.
When I started down this hole in late 2023 I did exactly what I knew not to do: chase the next shiny thing. Double down on the next one, hoping to make it all back. That failed miserably, repeatedly. I am now in a hole the size of Mars.
The hardest part, for many of us, is the mental side of the game. When things are good we are full of gusto and confidence. When things are bad we hunker down, alone, and stew over the what ifs. The what ifs. That is a big one. What if I sold then, or bought in there, etc. This can absolutely wreck your mind, your sleep, and overall health. So, for the first time in my trading career, I hit the pause button. Full Stop.
This full stop approach was extremely difficult the first few weeks. Checking my accounts all the time, reading all the posts I could find on my plays (all garbage), and trying to see what I could get into. After the first few weeks it got easier. I was checking my accounts less, I was online less, I was thinking about it less.
This is something many of us should do more often. For me, it sucks that it took this to realize it, but now I am thankful for it. Would I rather be green across the board? Of course. Would I rather not be holding bags on top of bags? Of course. However, since I have hit the stop button on trading, I am feeling much better. I have less concerns. I get outside more. I do other things to pass the time.
I have also taken time to create a true strategy for when I get to the point where I want to play again. Everyone should have one. What if I never have any play turn around in order to implement the strategy? If that is the case, that is the case. I am prepared for that. Do I think that will be the case? No. the odds are in my favor that some position, at some point, will turn.
I have worked on following accounts of folks who represent the facts well. Good or bad. Prior to this I would follow accoutns that would only hype things up. That's all well and good, but I need (and prefer) a more balanced source pool. I now have a solid stable of accounts I follow that will give an opinion of a stock, with an article or due diligence that backs up some of their opinions. They state what is out there, the reality of what they see -- not just what they want others to see. They also will own when they back something that fails. To me, this provides others confidence that we are not alone. That one bad trade isn't the end of your career. That we all stumble sometimes as we try to make it.
It does help my perspective a bit that I only play with what I could lose all of and still pay the bills. I lost sleep because I was losing and it sucked. But if my entire account went to zero, absolutely nothing at the end of the day would change for me and my life.
I love trading. I have made many a dumb mistake. I would never judge others on mistakes. It happens. It is how we manage the dark times that make the light shine brighter when things are great. I wish everyone the best and I will see you back out there soon.
Cheers.
Jonathan Anderson is a contributor for Degen Magazine. His interests lie in real estate, the economy, cooking, interesting things, and the market. Follow him on Twitter for more: @I_am_stockchef
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