Welcome to the new format of the Steady Trade Podcast! After two fantastic seasons, we’ve listened to all of your comments and feedback and are moving toward a new model with the show. From now on, Steady Trade Podcast episodes will be released on a weekly basis, so that you can keep it steady without extended breaks!
To kick off the new format, our latest episode reveals a cautionary tale inspired by real-life events: a little story we like to call Stephen Blows Up His Account. While initially hosts Tim Bohen and Stephen Johnson had a different type of episode planned, when this unexpected event occurred, they made room for discussion about this all too common trading pitfall. After all, many a trader has experienced his or her account detonating right in front of their eyes, but it’s a surprisingly little-discussed topic.
Blowing up your account.
Don’t worry: physically, Stephen is OK (well, you know, aside from the copious amounts of alcohol he drinks). To say that his account “blew up” doesn’t mean that there was an actual explosion. Rather, it means that his account was totally depleted through an unfortunate series of events. In a nutshell, Stephen took a thousand dollar account to about 50 dollars, taking a huge loss that wiped out pretty much all of his capital. As Tim observes, Stephen even mentioned in the past that he was going to experiment with 1k and even said “if I blow it up I blow it up”–unfortunately, his flippant remark turned out to be prescient.
Blowing up an account: how does it feel?
Picture this: you are riding your bike down a hill and gaining momentum. And then you crash…but you crash into broken glass, then fly off a cliff. Did we mention it was the same day your romantic partner left you for your best friend? That’s how it feels. While Stephen can joke about it now, it’s undoubtedly a terrible feeling to lose everything so rapidly.
However, there is a silver lining to this situation. True, Stephen lost a thousand dollars, which is a sizeable sum. However, talk about a lesson that will stick with him! If Stephen hadn’t lost the money and had continued to make the same mistakes, he could have fallen into the common trading trap of believing himself to be invincible, and potentially could have suffered a much bigger loss later on.
What blows up accounts?
In the show, Stephen tells his sad story of loss and lament, detailing how one bad decision led to another and left him in the poor house. Unfortunately, while he started with a trading plan, loss led him to make poor decisions that found him “chasing” a win, even against his better judgment.
In retrospect, Tim and Stephen are able to talk specifically about what went wrong and about how Stephen fell into a trap. Stephen describes it like running with all of your might into a Game of Thrones-like impermeable wall. Sure, you might be able to run into it, but the wall has more resistance than you. And well, he lost his money. Nope, he didn’t get through that wall.
Back to the plan.
As the hosts discuss Stephen’s loss, they begin to discuss the specific stock and circumstances that led to his loss. Unfortunately, hindsight proves 20/20 here, and it’s easy to see in retrospect how Stephen could have done things differently.
In going through what went wrong, it’s pretty easy to determine what happened in Stephen’s situation. Everything was very obvious. However, sometimes it takes something really bad to happen for these lessons to ring true.
They discuss how it is that errors like this happen, and how your personal leanings can play into the trade decisions that can make you suffer losses They also talk about how Stephen really does know better, and how he can use his spreadsheets, journals, and experience to move forward differently. Learn from Stephen’s mistakes so that you never have to suffer this kind of loss!
Thanks for tuning in to the new, serial format for the Steady Trade Podcast! Stay tuned for weekly episodes covering every aspect of how to be a steady trader with long-term, reliable success!
Did you love this episode? Be sure to leave an iTunes review!
Also, Have you ever blown up an account!?
You guys joke a lot (which makes listening so much fun) but the info you present is also SO useful!! Thank you!!!
Great podcast as always. wish I have been able to do more studying for stocks.
Thanks for listening Sue!
Thanks you guys and Happy New Year. You are actually a very (verra:)) calming influence offsetting all those trigger happy cowboys in the chat rooms out there! And Steven, stay steady! The changes you’ve made in the last months are so much more important (and more real) than anything else will prove to be. Keep up the good work both of you.
Great comments Lezley, thank you!
Thanks guys. Super enjoyed that.
Happy to hear that Janice, thanks!
I loved the Game of Thrones analogy Stephen made. It really does describe what running into strong resistance (or support) is like for the price.
I do have one question for Stephen. Is it ridiculous? :=)
Haha, thanks John!
Love it but how can you tell a stock has run it’s course
Lot of it comes with experience. Thanks
You guys have made your podcast show awesome!!! Very informative and with your unique way of communicating makes us listeners keep our interest in your show and lose us with boring info..you keep it real yet entertaining!! GREAT JOB GUYS!!!
Thank you very much for the kind words Rolando!!
Thanks for sharing Your BLOWUP story Stephen. Tim, I am going to try your favorite setup this week, and blame you if I have a loss. Seriously guys, all this is very helpful!!
Thanks Scott!
What a great show! Lots of information packed in with very entertaining commentary. I have to say I can relate so much more to you Tim then Stephen. Even though I am just 4 mths into my training journey. Thank you and keep up the wonderful broadcasts.
Thanks a lot Mlutz!!
As always helpful and informative, like the humor also, Thanks Tim & Stephen
Thanks for listening Ned!
Ugh…
Just watched this one. I’m currently an LMFA bagholder who averaged down to 1.83
Damn thing is stuck in 1.50s. I guess I’m hoping for a spike someday. I know, I know, hope is not a strategy…