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In my early years of trading, I was truly awful. Despite my passion for studying the market — having already read the first two Market Wizards books (the only ones available at the time) and several other books on technical analysis, such as Technical Analysis Explained and The Visual Investor by John Murphy — I struggled.

I saw momentum everywhere, convinced that everything was going to soar. It was the end of the tech boom of the late ’90s, early 2000. One particular episode stands out and inspired the story I’ll share with you at the end. I was bullish on a European tech stock, PT Multimedia.

I was certain it would reach 100 EUR, and it did. I had been bullish since it was at 27 EUR, yet I managed to lose money on the move, even as it hit 100 EUR. The learning curve is tough and must be navigated. No trader starts out competent. Today, I laugh and wonder how I could have behaved that way back then, especially since I already had some technical knowledge. But all those who became great traders went through a similar, if not worse, journey.

Enjoy “Trading Troubles: The SOCK Setback.”

Amidst the vibrant hustle and bustle of the trading room, with traders shouting orders and screens flashing with numbers, John Spinner found himself emotional and restless as he eagerly shared his latest set of trades with Mortimer Sagecroft.

“You been watchin’ Sockify (SOCK) lately?” John asked, a mix of anticipation and worry evident in his voice.

Mortimer, always observant, nodded knowingly. “Certainly. I’ve heard you sing SOCK’s praises countless times, John. And now, it’s hit $103 this morning. Well done, John! Nicely played.”

But John’s expression soured, frustration bubbling beneath the surface. “The problem is…”

“What’s the problem, John? You were riding high,” Mortimer interjected, perplexed by John’s sudden change in demeanor. John sighed heavily. “The thing is… I called that climb like a champ but still ended up in the red on SOCK.”

Mortimer’s disbelief was evident. “How is that possible?” Maxwell Dither, catching wind of the conversation, couldn’t resist adding his two cents. “Did you mess up your order? Sell instead of buy?”

Shaking his head, John explained further. “Let me break it down. The stock soared from $10 to $30 in a flash, and I read everywhere that it was bound to hit $100. With the tech market booming, I bought into the hype…but when it hit $30, I set a limit order at $27, hoping to catch the pullback, you know? Not diving in at the peak…”

Mortimer’s concern deepened. “Oh no! I see where this is going, John.”

Undeterred, John continued his tale of woes. “Thing is, the stock just kept climbing. I couldn’t get in at $27…it surged all the way to $45. So, afraid of missing out, I hit it with a market order, filled at $46.50.”

Trying to offer some comfort, Maxwell chimed in. “You still caught a big part of the rally, Spinner. SOCK more than doubled since then!” But John’s embarrassment was palpable.

“But when I bought in at $46.50, the market took a nosedive. It dropped to $32, and I panicked and bailed.”

Mortimer offered a rueful observation. “The tail wagged the dog.”

Maxwell attempted to lighten the mood. “Come on, John. It could have been worse.”

John, feeling as red as a pepper and on the brink of tears, lamented, “And then the stock shot back up, and I was too scared to jump back in after getting burned…and today it hits $100. Could’ve made a killing, but somehow managed to lose money.”

As John stood there, feeling like a ripe tomato and struggling to hold back tears, Mortimer chuckled softly. “Well, John, it seems the stock market decided to give you a crash course in trading.” Maxwell, always quick with a quip, added, “But hey, at least you’ll have a heck of a story to tell at the next trader’s meetup!”

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