You read that title line right. It was written to both grab your attention and teach a very important lesson.
This story starts with a contest we initiated in late 2012.
As we always try to give back here at The Day Trading Academy (DTA) we launched the contest to give someone the opportunity to achieve their dreams through day trading.
With the launch of our new Lifestyle Podcast on our sister site, WanderingTrader.com, we plan on having another contest in the near future.
The winner, now known as Honcho Extreme, won some amazing prizes. Meet him here and watch the video he submitted.
Included in the package was a free one year training program from DTA, a one year license with NinjaTrader, and an all-expenses paid trip to Jordan courtesy of the Jordan Tourism Board. The idea was to give him the opportunity to learn how to trade and also expose him to the lifestyle of day trading and traveling.
We had a great trip and Honcho didn’t take this opportunity lightly.
We first met while we were swimming at the Devil’s Pool in Livingstone, Zambia. Just to put this into perspective this is when our founder, Marcello Arrambide, decided to swim on the edge of one of the largest falls in the world. Being a risk averse day trader, Honcho decided to join him (they actually met on the boat on the way to the cliff).
We had an amazing time in Jordan as he was able to experience the life of being able to day trade and travel around the world. A few years later as Honcho decided to quit his job, day trade, and travel around the world himself, he decided to visit us in Medellin.
Our Founder, Marcello Arrambide, living life on the edge at the Devil’s Pool in Zambia
He wanted to see what our day trading centers were all about and get this, he was helping us train our Colombian traders too.
Upon his arrival he invited a friend, another trader that is part of the DTA family, where we started to discuss investment ideas. We have been getting demands to offer a premium investment report service due to our spot on analysis of global markets. We plan on providing detailed insight into what we are investing in and also opportunities around the world in the near future.
While we discussed the same investment concepts and analysis that we talk about on the Investing Blog, we also discussed investing in silver and penny stocks.
Take a look at the precious metal Palladium make an all time high as of yesterday. We talked about the opportunity in the scarce metal on March 20th. We reminded investors to look seriously at this metal on June 25th.
We try to analyze upcoming market segments and industries that could provide good returns. It isn’t always easy but we have been able to make very good profits with our picks so far. At the turn of the New Year there was a lot of news of the new Marijuana Industry.
Upon further investigation we could see the potential.
The worst case scenario was too invest in a few hand picked marijuana penny stocks and possibly lose a few thousand dollars. The absolute best case scenario was to see these picks explode and become very wealthy in a short period of time.
The latter occurred. With a rush of interest into penny stocks there were pump and dump scams occurring in the marijuana stock industry that sent these stocks flying.
In a matter of one week we were up $65,000 on a mere $10,000 investment.
“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” ~Warren Buffet
As the market exploded to the upside we were seeing returns of over 10,000% in a matter of days. As an international investor and a day trader that has been in the markets for nearly 12 years, the decision to take advantage of this opportunity was purely analytical.
There was a great opportunity to make money in this new market as Colorado was legalizing the personal use of marijuana.
Once we were up, collectively, over $500,000 on a mere $50,000 to $70,000 investment the rational and decisions became purely emotional. I remember the situation clear as day. When GRNH (among others) exploded I immediately looked to exit.
I couldn’t enter the trading platform and had problems entering orders.
Too many other people trying to exit?
I waited until the market recovered and had a second opportunity to exit with very good profits and didn’t. All on the hope that market would return to those previous levels.
This happened to all of the stocks that we invested in. At the end of the day we weren’t able to make the $500,000 in profits because of greed and emotion. We still made over 4,000% in gains but it could have been 10,000%.
“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” ~Warren Buffet
I wanted to share this story because day trading and investing isn’t always about making the perfect decision. It isn’t so much about making money either. Day trading is about discipline and psychology. We have to be able to think about the markets with an analytical mindset and a plan on our exits before we even enter.
These are all concepts that we teach all of our traders in the E-mini markets. All of our beginners start with our HTS management system where stops and targets are fixed.
No greed involved and no fear either for that matter.
Even with nearly 12 years experience in the markets it is important to understand that we are always going to make mistakes. We are human. We have to understand that.
Camels in Wadi Rum Jordan
To be a successful day trader we have to identify our mistakes, correct them quickly, and continue to attack and dominate the markets. The market is never going to give you an opportunity to rest. It isn’t going to give you an opportunity to catch your breathe.
Discipline, patience, hard work, and fortitude is what is going to get you to the top.
A strong community that is going to help you in trying times is also very helpful. This is another reason why we love to be part of DTA so much. We have guys that truly care about one another and are out to see each other succeed. The chain is only as strong as the weakest link.
Let this post remind you that becoming successful isn’t about one home run. It is about the small base hits that you make. It is about the three or four first downs to make it to red zone, not the hail mary. It is about every game you play for a professional club to prepare you for the World Cup.
Consistency is key in this game. One hit wonders do not last long. $100 everyday will turn into $1,000 everyday. Soon that will be $10,000.
Just remember that when you are making the $100 a day.