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I've learned a valuable lesson over the past few months, and unfortunately, it cost me a couple of good friends.
The lesson is that, not only is trading much harder than people think, but it is almost impossible to teach someone to trade. Or rather, even if you tell someone exactly what you are buying and when, and when you are selling, they still will take things into their own hands, and manage to screw up the trade.
I had a couple of good friends who I confided in about my trading success and they of course wanted me to help them make money with their investments. I cautioned them both that trading is far harder than they thought, and that I had spent over 10,000 hours working on psychological weaknesses and learning to trade, having blown up multiple smaller accounts in the first few years when I was starting.
Well, they still wanted me to tell them what I was trading and when, and so I said, 'Well, you'd better not put any money in that you aren't ok to lose' and they agreed.
Well, I know one of them started off with about 25,000$ and the other, 40,000$ in their brokerage accounts, and I knew they were both trading AFFY to begin with. Well, I was updating them with when I was buying and selling, and after a few emails I started sensing that they didn't seem to care too much about my emails. One of them, I could tell over email, just started ignoring all my emails, esp when I told him I sold AFFY at 7.20's (after it had gone down to like 6.30 or so a few weeks before)... and the other, flat out told me that he had reduced his exposure to AFFY (of course when it was in the low 6's again, I think he lost like 4000$ or something.
I did talk to one of them in person, trying to feel out if he had sold at a loss, by saying something along the lines of 'Hey, did you see this messageboard post, where this guy sold at the low, only to see the stock to rally the next week? It's amazing how people's emotions mess with them and make them lose money' and he quickly agreed with me, so I was pretty sure he had succumbed to his emotions and lost money. And they probably hold me somewhat responsible for that.
So now I've sent them some 'Hey, how's it going' emails and they are both flat-out ignoring me. My only reasonable explanation is that they decided to take trading into their own hands, not understanding how the psychological weaknesses of new traders are far too powerful to overcome, and they both lost money.
I guess it's kind of like a corollary to the advice that the quickest way to lose a friend is to lend him some money. Well, I'd say that an even quicker way is to get a non-trader to open a trading account.
I've also thought about my posting on this forum, and I am starting to believe that when a non-trader sees my successes (not 100%, but more profitable than not) then they believe that maybe trading is something that they can do too. And as a result I am essentially making people lose money as they don't know what they are getting into.
My point of posting on this non-trading messageboard in the first place was to demonstrate that trading profitably is not 100% impossible, and those people that say that it is need to consider that, maybe their experience, and those of their friends does not prove anything. As I have said many times, trading profitably is not impossible, but it is so difficult and time consuming at the outset (with no guarantee of success) that unless someone has 10,000 hours and at least 30,000$ (3 blocks of 10,000$ that they will lose each time) then they will absolutely fail.
As a result, I think I am going to take another break from posting exact tickers, since I don't think most people are trading off my tips anyway.
g
The lesson is that, not only is trading much harder than people think, but it is almost impossible to teach someone to trade. Or rather, even if you tell someone exactly what you are buying and when, and when you are selling, they still will take things into their own hands, and manage to screw up the trade.
I had a couple of good friends who I confided in about my trading success and they of course wanted me to help them make money with their investments. I cautioned them both that trading is far harder than they thought, and that I had spent over 10,000 hours working on psychological weaknesses and learning to trade, having blown up multiple smaller accounts in the first few years when I was starting.
Well, they still wanted me to tell them what I was trading and when, and so I said, 'Well, you'd better not put any money in that you aren't ok to lose' and they agreed.
Well, I know one of them started off with about 25,000$ and the other, 40,000$ in their brokerage accounts, and I knew they were both trading AFFY to begin with. Well, I was updating them with when I was buying and selling, and after a few emails I started sensing that they didn't seem to care too much about my emails. One of them, I could tell over email, just started ignoring all my emails, esp when I told him I sold AFFY at 7.20's (after it had gone down to like 6.30 or so a few weeks before)... and the other, flat out told me that he had reduced his exposure to AFFY (of course when it was in the low 6's again, I think he lost like 4000$ or something.
I did talk to one of them in person, trying to feel out if he had sold at a loss, by saying something along the lines of 'Hey, did you see this messageboard post, where this guy sold at the low, only to see the stock to rally the next week? It's amazing how people's emotions mess with them and make them lose money' and he quickly agreed with me, so I was pretty sure he had succumbed to his emotions and lost money. And they probably hold me somewhat responsible for that.
So now I've sent them some 'Hey, how's it going' emails and they are both flat-out ignoring me. My only reasonable explanation is that they decided to take trading into their own hands, not understanding how the psychological weaknesses of new traders are far too powerful to overcome, and they both lost money.
I guess it's kind of like a corollary to the advice that the quickest way to lose a friend is to lend him some money. Well, I'd say that an even quicker way is to get a non-trader to open a trading account.
I've also thought about my posting on this forum, and I am starting to believe that when a non-trader sees my successes (not 100%, but more profitable than not) then they believe that maybe trading is something that they can do too. And as a result I am essentially making people lose money as they don't know what they are getting into.
My point of posting on this non-trading messageboard in the first place was to demonstrate that trading profitably is not 100% impossible, and those people that say that it is need to consider that, maybe their experience, and those of their friends does not prove anything. As I have said many times, trading profitably is not impossible, but it is so difficult and time consuming at the outset (with no guarantee of success) that unless someone has 10,000 hours and at least 30,000$ (3 blocks of 10,000$ that they will lose each time) then they will absolutely fail.
As a result, I think I am going to take another break from posting exact tickers, since I don't think most people are trading off my tips anyway.
g
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