– What’s up, Tim Sykes, millionaire mentor and trader, here presenting you with a very interesting video of my student Tim Bohen. He’s a part time trader, a family man, very disciplined, learn from his experience. (intriguing music) So biggest loss. It’s almost a perfect example of what not to do and something that I talk about not doing and Sykes talks about not doing. It was, I think it was FAZ or FAS, but I think it was FAZ. I think it was the triple X inverse financial ETF, which is a big mouthful I know, but I’ll explain. So ETFs especially the triple leveraged ETFs, I say avoid, avoid, avoid. They’re tempting because they move a lot. This is back kind of in the financial crisis when these triple leveraged financial ETFs were moving huge because of Bear Stearns, Lehman Brothers and so on and so forth, but my dilemma and something that I still remember to this day was, it was a slow day, there wasn’t much going on in penny stocks.
I was actually very consistent in trading penny stocks at that time. I’d learned the skills, I was grinding away, doing all the right decisions. Now comes this day where there’s basically nothing going on in penny stock land, which happens from time to time. I got lured into, I was in a chat room, that trades a lot of these triple leveraged ETFs. It’s a chatroom full of degenerates, but I kind of got lured in by them posting these big gains, problem number one.
It’s all about you, it’s not about the other guy, you don’t know what’s this guys experience. Does he have a million dollar account? You don’t know what’s going on behind this guy, so don’t get lured into jealousy or trying to follow other traders. Second thing was I got outside my niche. I didn’t, I’d never traded, well I shouldn’t say never, I might have dabbled in ’em, but I’d never aggressively traded these triple leveraged ETFs and so I’m outside my comfort zone, I’m bored, I’m looking for action, you know if I remember right, I could be wrong, but it was like a Friday afternoon.
This is back when I was at my business. Friday afternoons we were a services company so it was always kind of slow. So I’m looking for action, I’m in this chat room, I’m jealous of these guys posting big gains, all these mistakes you make. I jump in with no plan, that’s the ultimate cardinal sin. I was like ah, this is famous last words for day traders, I’ll just buy it real quick and make a couple hundred bucks and move on. That is not a plan.
I didn’t have a stop loss involved. I didn’t have key support and resistance levels. I didn’t have any sort of plan. So I buy this stock, I think it was the short ETF, which means it moves up when the financial stocks go down, but anyway, I buy it, immediately goes against me, within seconds, so I’m down 500 bucks. I went into this saying, oh I’ll just make a quick 200 with no stop loss, it’s 500 against me, I mean within seconds.
So now I start justifying, no I’m like oh you know I can make this trade work, it’s middle of the day afternoon, it’ll probably turn around, I’ve got time. So now I’m justifying a loser. Then the ultimate mistake, the one that ruins everybody. Stock starts, or ETF, it’s an ETF. It starts to base, but it trades like a stock. Starts to base a little bit. What do I do? Instead of stopping now, I add. So I’m adding to a loser.
So boredom trade, found it in a chat room, jealous of other traders making money, looking for action, no trade plan, and adding to a loser. I mean, I think you guys can probably guess how this turned out. So it cratered, fell down, I ultimately stopped out, at my max pain point, which I think was eight or nine thousand dollars and I mean this is like 15 minutes, okay. This isn’t like eight or nine thousand dollars in five days, six months, like 15 minutes. So you talk about paying your market tuition, I paid a lot of freakin’ market tuition that day, in that 15 minutes, but notice what I said there. All six of those rules apply. Don’t fall into that trap of trading stuff just for the action that your not familiar with, no plan, adding to a loser, all these things.
So the one good thing is I mean I still had to take plenty of losses. I still make plenty of mistakes, but I haven’t made that mistake again. So I guess there’s value in that. – Hey, Tim Sykes, millionaire, mentor, and trader. Thank you for watching my videos. I hope that they help you. I wanna share everything that I’ve learned over the years. You can check out more videos right over there and also click subscribe so that you can watch all of these videos. Get that knowledge and become my next millionaire student. .
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Every trader has the same goal: win. Every trader will also lose. Even the best traders like Tim Bohen.
Experience, knowledge and preparation are key in this market but they won’t protect you from losing.
In this video Tim Bohen talks you through his biggest loss and the rules he follows now to avoid losing.
He was already trading penny stocks, had the right skills, and was making all the right decisions before this loss. So, what happened? He fell into the slow day trap. He got lured into a chatroom with big gain postings.
The most important rule: It’s all about you. You don’t know what’s on the other side of the computer so don’t make assumptions or compare yourself to anyone.
Trading is a solo sport — every person for himself.
Don’t fall into that trap of trading just for the action when you’re unprepared.
Jumping into a trade with no plan is the ultimate cardinal sin.
Make sure to listen to Bohen’s story and learn from his mistakes.
What was your biggest loss? Do you agree with these rules? Leave a comment below and let me know!
Hey, it’s Tim Sykes, millionaire mentor and trader. Thank you for watching my videos. I hope that they help you. I want to share everything that I’ve learned over the years. You can check out more videos right over there, and also click ‘subscribe’ so that you can watch all of these videos, get that knowledge and become my next millionaire student.*
—————————————————————————————————————-* Results may not be typical and may vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here: https://www.timothysykes.com/terms-of-service/