Immersed in euphoria, I don’t know how I managed to close that position, locking in some $12,000 in profits. Now try to imagine what was going on in my head. A couple of months worth of salary in one day!! I was hooked!!Slawek J —
The beginnings of my first trade go further back in time, way before the trade itself.
In 2006 I cashed out on my real estate in Poland. That was the year when I decided to stay in America for good. I had a “huge” amount of money on hand. About $50,000 gets dropped on my laps virtually overnight. That was a lot of money for me, however, I didn’t feel like I was rich. I was 27 years old and I felt deeply responsible for the situation I found myself in to.
At that time I was working as a second-hand auto mechanic, fixing cars for a Ford dealer. Buying a house in the U.S. was the first thing that crossed my mind.
Fortunately, for me, the real estate market was at its peak in America. I knew a few people that were following the housing market and they told me that it was too expensive to get in at that time, so I backed off.
WHAT TO DO, THEN??
So I went to the General Manager at my workplace and asked him:
— “George, what shall I do? I have a bit of money, and banks are not paying much for CDs.”
George looked at me and said:
— “Slav (that’s how they called me over there), go and buy Ford shares (NYSE: F).”
George was closing all the deals on the floor as far as sells were going at the dealership, so I was thinking “this guy must have a good finance background”. I trusted him when it came to money matters.
In my mind, I thought that I would have to sign some documents somewhere in the New York Stock Exchange, give them my money and then they would send me the paper shares back. That’s how much I knew about trading at the NYSE. Living in a studio apartment right on the beach, it got me wondering where I could hide a safe vault with my paper shares.
Thank God one of my friends told me that everything was done online because I found this nice, but priced out, water and fireproof safe vault.
So I opened a trading account at Scottrade and as soon as my money hit the account I got into my first trade.
It was July 22nd, 2008. I dumped all the money on Ford and watched my trade for a little bit into the market close. I remember very well the first emotions when the position’s P/L was going back and forth between green and red. When it was green, I was thinking to myself “What a genius move. I will keep these Ford shares until I retire.” When flashing red I wanted to cash it out right away.
Later that day, I went to work to continue fixing cars. Luckily for me, I had a friend in the accounting department who let me log in to my account to check on the position.
Lunchtime: my account was up about $3,000, so I thought “Great, I made my monthly salary”. After lunch, I am up about $12,000-$15,000 on the position. “Wow!”, I thought to myself. Then I started to panic and, at the same time, to imagine spending that money in a trading office with a bunch of useless stuff.
I am sure you already know that I had absolutely no plan for entry, exit, or managing the position. Just a few weeks earlier I was thinking I was getting paper shares, for goodness sake.
Immersed in euphoria, I don’t know how I managed to close that position, locking in some $12,000 in profits. Now try to imagine what was going on in my head. A couple of months worth of salary in one day!! I was hooked!!
That day was Ford’s earnings announcement date. The next day, the shares dropped well below my entry point and kept on dropping. I felt like a genius and a professional trader at the same time for selling my shares the day before.
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