Tag: trading

A very short story: the worst trader in the history of the universe

“You are the worst trader in the history of the universe.”

He finds himself repeating this phrase again. A habit that he’s known all too well for a number of years now.

It wasn’t always this way. Far from it. During his 20s, he’d made a very nice living for himself trading in the stock market. But that seems like ages ago. And it was before his problematic tendencies got the best of him.

The phrase isn’t even that true. He knows that his main achilles heel is needing too much action. Not focusing on just his very best ideas, and putting too much faith (and money) in his secondary opinions that clearly aren’t as accurate.

But too often, that doesn’t stop him.

This time, one of those lesser quality ideas led to buying some call options (needing the market to go up) on Tuesday that expire at the end of the week. Options are basically the crack of the financial markets for degenerates, so he often gravitates to them.

From the very beginning, as is often the case if you don’t time option trades like these very well, it’s an uphill battle. The market ends up having a resilient Wednesday and closing a little higher. So even though there are only two days left for things to go as high as he needs, the options haven’t lost too much value yet.

Still hope. That’s all that seems to matter…..right?

But then the next morning….some economic news comes out that causes stocks to open a good bit lower. Just like that, the trade is almost dead in the water (unless there’s a quick, big reversal). He’s not expecting that to happen though, so his options will likely be worth pennies on the dollar for the rest of the day.

There’s no blaming that news report for “bad luck”. That’s something he never does, because luck evens out in the long run.

What he does curse is his decision. The lack of discipline and patience to wait for only the best spots. The relentless punishment that often endures otherwise.

Nothing left to do but hear that same resounding thought in his head again. Regardless of how true it is, it sure seems that way sometimes:

“You are the worst trader in the history of the universe”

Boiling point

The last two weeks had already not gone well. As I wrote about recently, the quality of my trading/betting was still full of the same holes (and things had started to slip back). In addition to that, I haven’t found any of the willpower necessary to start fresh in my new place and move toward improving the other parts of life either.

Needless to say, I was already on edge some. Then today happened, and I’m fighting the urge to completely tilt.

Put myself into a difficult spot on a trade that I didn’t need to have. Which led to me bailing on it about an hour too early (and just before the stock market turned in my direction). Turning what could’ve been a very good day into another bad one.

It’s fine when you’re wrong about a situation, cause obviously that will happen sometimes. But when you were very right about the market’s direction and still get stung b/c of how you handled things, that is a BIG problem.

Especially when there’s this: while I’ve written plenty about my attempts to recover from past career/life failures….even though it’s often done with plenty of urgency, that’s been taken to a whole new level this time.

Why? First, because I’m finally back in the place where I have a chance to be happy. If I can’t make life work here now, my chances of ever doing so before I’m too old to enjoy it go way down.

And second: for many years now, whenever I had a new setback with trying to work on my own, getting a 9 to 5 again felt like it was always there as an option (albeit one that I did not prefer at all). But this time, and especially in this city, I don’t want to settle for that anymore.

Between my last experience where I was hired early last month (and I subsequently left) and how I’ll have a much better basis about feeling better about myself if I have my career freedom permanently again, I’ve turned much more against getting a traditional job ever again.

Naturally that means that I have to make things work out now. I know that urgency seems like quite a stressful way to go about it, but oh well. Things have never improved without the urgency either, so I’m not making my situation worse by feeling that way.

So I’m trying to take a very deep breath after moving on. Forget about this recent slide and how awfully it accelerated today, and start fresh moving forward. But unfortunately, that’s never been my way.

It’s like trying to catch a falling knife.

And I’ve never been able to find the handle to.

Work, sabotage, and life. Not a good mix

Given my non-traditional career path, some might wonder what I meant when I referred to my discipline issues in my fields. Here are a few examples (and the destructive common theme):

Super Bowl XVI. I was seven years old. This was the first sports bet I ever made (and isn’t it funny how far back we can trace things sometimes.) The 49ers were playing the Bengals, and I bet my grandfather a dime that Cincinnati would win (nope, I didn’t quite have $1000 yet at that point eh. Literally 10 cents). You’re probably assuming that I’m referring to ANY bet being made, especially at that age, as a trend-setting problem. Not at all:

In the back of my mind, I didn’t even think I was going to win. My instincts, even at that age, were telling my that San Francisco would win that title. But I wanted the Bengals to win. I took something that I knew felt like a bad idea, and it was. SF 26, Cincin 21.

Fast forward to around age 16. I had a baseball card business throughout high school (while most teens were working at a fast food joint on weekends, I was setting up shop at sports card shows, buying and selling.) And I loved it. One day on vacation, dad and I were killing time at the local mall while my mother and grandmother shopped. There was a card shop there, so naturally I had a look. Not much going on, so I decided to spend $4 on a pack of ’82 Donruss baseball cards. The prize for that set was a Cal Ripken Jr. rookie card worth $35, and wouldn’t you know, I pulled one from that single pack. Great, right? Happiness, naturally? Nope…..

You see, the $4 investment was a bad idea, because there was virtually nothing of value out there in ’82 baseball sets except for the Ripken rookie. And your chances of getting one in a pack were about 1 in 45. Therefore, spending $4 for that shot at a $35 card was very poor value (in fact, just about the worst value for ANY old packs of any year). And I knew this full well. Even told that to Dad as we were leaving the store. So why on earth did I buy it? The fact that I got lucky doesn’t change how poor the choice was.

Then, about 8 years ago. I was starting to click some with my market trading again, and had just taken a large futures position on the S&P 500 to drop (the type of trade that I usually only held somewhere between a couple hours and a couple days). These futures trade throughout the night, and by around midnight, my position was off to a great start. I was smelling blood, and thinking how that trade might be a final big step in establishing continued success again.

But as the overnight hours leaked into sunrise, I could see that the market didn’t look like any further downside that I needed would happen then. So while my futures contracts hadn’t turned against me yet, it looked like the trade could turn at any time. Finally, around 7 AM, this started to happen. I still remember watching my screen and seeing the S&P spike up about four points at once, and thinking how that was likely the final nail for this trade’s potential. Time to get out of my contracts immediately, right? And based on what I was seeing, even switch to the other side and buy, of course?

You would think so. But that’s not what I did. I sat there and just watched it. Frozen by unfounded hope for the rest of the trade and by mild irritation, I let the market rebound all day against me. And did nothing. Had I exited my trade at around that 7 AM point, things would have still been in very good shape for me overall. And had I switched sides for the rest of the morning then too (as I knew I should), I would’ve really crushed things that day. Instead, I let a fantastic spot turn into a problem (as I’d done so many times before). And never really recovered afterward.

Why do we do this to ourselves sometimes? Why make these mistakes? In my case, a big part of the answer is that, as mentioned just above, I get frozen by hope sometimes. Or I get bored and seek out a high. But that doesn’t cover nearly all of it. What is the biggest part of my destructive habits? Self-sabotage. Read back up to the top again……hell, I was doing the same things occasionally when I was seven damn years old.

For all the time I’ve spent in learning about people (both myself and others), figuring out WHY we sabotage ourselves is still often a sticking point. I know a common argument is that it’s a lack of self-esteem and that, on some level, you don’t feel you deserve to win. But I can sure as hell say that wasn’t a problem for me at age 7. So I think there’s a lot more to it than that. Plus, it’s not like I’m always doing these things by any means. Just like I mentioned about my discipline issues before, you seem to cycle back and forth from the good choices to the bad ones. Though in my case, the deciding factor has been how (too often) I let the bad ones cause more damage than the good ones reward me.

All I know is I’d better get to the bottom of this soon, regardless of how difficult it is to. It’s at the top of my list of life stumbling blocks, so I’ll never turn things around permanently if I don’t.