‘WTF’ is the Most Dangerous Symbol for a Daytrader!
Daytraders all have a few stock symbols that send chills down our spine. If you shorted DRYS at 10 before it ran to over 100 three sessions later you know what I mean. Remember KBIO? We all have a list. Some call it our DNT (Do Not Trade) list. If you’re on the right side of one of these crazy moves, you love that symbol for life. Heck, you might even get a personalized license plate with that symbol. But if you’re on the wrong side of a crazy move….DNT list for life on that symbol!!
For me, there is only one symbol that I NEVER want involved when I’m trading. That symbol is WTF!!
WTF, as I’m sure you already know, stands for ‘What The F***’. If you’ve traded for any length of time I’m sure you’ve considered doing something VERY DANGEROUS that all your senses were telling you not to. All your trading mentors from over the years were in your head saying ‘DON’T DO IT’! So what did you tell yourself? You said, WTF, I’m clicking the mouse anyway. Maybe this time my rules won’t matter. Maybe this time doubling down on a losing trade will pay off. Maybe this time I don’t place a stop but instead I buy more. Maybe this time walking away from my screens while I’m in a terrible trade will result in coming back later to a winning trade. WTF, why not?
Let’s walk through this together. Imagine you average down on a losing trade or you ignore your stops or you walk away from your screens while in a losing trade. In other words, imagine you said to yourself, ‘WTF, why not’ when you know that’s the wrong thing to do if you want to be a successful daytrader. There are 3 possible outcomes.
One: You get your ass handed to you. This is the best possible outcome because there is no better teacher than pain. I don’t know of any successful daytraders that have not blown up at least one account…most (including me) have blown up several.
Two: You end up flat on the trade, no gain no loss. This is a bad outcome because you learned nothing and will probably repeat the WTF mistake until you get result #1 above.
Three: You end up making money on the trade. This is the worst possible outcome because you are now doomed to repeat this WTF moment probably many times even after getting your ass handed to you. Making money reinforces bad habits and delays your ultimate success, perhaps indefinitely.
What should you take away from this? Basically, nothing good will come from breaking your rules, or put another way, your WTF moment. Win or lose on the trade, you’ve set yourself back. You must have 100% discipline the entire time you’re in front of your trading screens. Unwavering, etched in stone, to the core of your soul, discipline.
I’m going to leave you with this thought. I’ve been running a trading chat room since 2004. I’ve seen everything you can imagine. I’ve gotten many, many emails from 1000’s of traders over the years. They’ve touched on every trading topic you can imagine. The success stories are my favorites. I love hearing about people whose lives have changed from learning to trade the stock market in a disciplined fashion. Heck, it’s changed my life immensely. The freedom, the money, being my own boss etc. It’s truly a dream come true. I get out of bed looking forward to work! How many people can say that? For 23 years I got out of bed heading off to a job I hated. After living both lives I can truly say being a successful daytrader is a million percent better!!
But I don’t only get emails about personal trading success stories. I also get ‘trading confessions’ if you will. I get the emails from traders that have blown up their accounts. The tone is somber, the words are heart wrenching. I’ve been in their shoes and it’s a TERRIBLE feeling. Do you know what every single one of these traders have in common? EVERY SINGLE ONE fell into a trading death spiral after breaking their own rules. And do you know what they all said to themselves BEFORE breaking those rules?
WTF, why not?
Purge these three letters from your trading vocabulary before you ever take a trade in 2017!!!