Horror Story: $10k lunch
Corona Del Mar, CA
Howdy Friend!
It was a busy day for Piers.
Instead of eating at the local sandwich shop, he had to take his order to go.
Back to the grind Piers!
He sat at his trading desk eating a freshly made chicken sandwich.
Little did he know that Newton's 2nd and 3rd laws would come into play in just a few seconds.
As he took a shark-sized bite out of the sandwich, the force he applied to the front of the sandwich led to an equal and opposite reaction...A big fat chunk of chicken plopped out the back of the bun.
This resulted in Newton's 2nd Law: The force of an object is equal to its mass times its acceleration due to gravity.
Which led to a hunk of bird meat hitting his left mouse button with sufficient force to *CLICK*.
That wouldn't normally be a big deal, but his mouse was hovering over an order to buy 250 bond futures.
At 100 thousand euros each, that was about 37 million greenbacks at the time.
Talk about an expensive lunch break!
Luckily he got out with "only" a $10k loss.
Most traders spend far more than that being educated by the school of Hard Knocks.
Most of us tend to learn the hard way that our trading style doesn't work.
The markets are the great equalizer.
Like Rodney Dangerfield said in Back to School: "I mean, the high school I went to, they asked a kid to prove the law of gravity, he threw the teacher out the window!"
I'd estimated that I blew through $30k and several thousand hours before figuring out how to play this game.
It was like having a baseball swing while playing golf. (true story), Or using a fork to eat soup, Or hunting elk with a BB gun.
Some people have spent way more me in their prolonged purgatory inside the School of Hard Knocks.
Peter M. from Australia was telling me a story how he traded unprofitably for 21 years until he took my teachings to heart (reminder: I'll share his entire case study with you tomorrow).
Talk about tenacity!
Many people would have given up after losing $10k to a chicken tender, 99.9999% would have given up after losing for 21 years.
What the Turtle Traders taught the world is that rules-based trading made the majority of their students successful.
The Turtles were from all walks of life.
While the game has changed (hell...I never thought we'd be so knee-deep in A.I), the basic premise remains the same:
1) Test trading rules with a computer. 2) Make sure you leave of portion of your data to confirm you're not over-fitting to the past. 3) Follow those rules. 4) Make money.
Oh...and 5) don't eat over your computer.
Until next time!
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Disclaimer: The results listed herein are based on hypothetical trades. Plainly speaking, these trades were not actually executed. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under (or over) compensated for the impact, if any, of certain market factors such as lack of liquidity. You may have done better or worse than the results portrayed.
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