This is what a trader who has been crushed sounds like

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I stumbled across the blog of a technology bull today. On Friday he threw in the towel after losing 32% of his account year-to-date.

I remember back in 2000 how I just watched my assets shrink on a daily basis, stuck in disbelief as an unrelenting market did permanent damage to me. It would take me more than 3 years to rebuild my business and I never forgot those lessons, until about 8 weeks ago.

I sold almost everything today and now sit with 90% cash. Whether the market rallies from here, or if I marked the bottom in stocks, is immaterial to me. This is a mountainous f*** up on my behalf and it will take me a long, long time to not only recover from this, but regain the confidence to make it back

The pain in the highest flying Nasdaq stocks has hit the biggest bulls hard. In many ways tech was the ‘general’ of this market and led the bulls to victory after victory but now that the generals have been executed, it might only be a matter of time until the soldiers are slaughtered.

Author: Adam Button

Adam Button is the managing editor of ForexLiveâ„¢. He was previously the chief currency strategist at XForex and has also worked with Intermarket Strategy. Adam believes there's an edge in knowing every tidbit of news. He was formerly the head of the markets team at the Canadian Economic Press and is a graduate of Ryerson University. Adam lives in Montreal, follow him on Twitter: @FX_Button.

2014-04-26T11:36:17+0000

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bull market|tech

Adam Button

5 Comments

  1. No worries mate…he’ll be back… Proverbs 26:11: “As a dog returns to its vomit, so fools repeat their folly.”

  2. fx market is a lot more unforgiving when you add leverage to the mix, at least with stocks if you hold onto them long enough the money could be made back, you cant do that with fx.

  3. Interesting to click the link, and enter a strange world of Nasdaq tickers. If I click “Upgrade to Premium” will I get to see him cry in live video? To be realistic, if this guy has been a stock investor he probably still has heaps in the 68% he didn’t lose. But these tech investors compare themselves to Mark Zuckerberg (or Mark Cuban back in the day), and so they always aim for the stars and end up crying. I guess he can kiss that dream of a 1.5-bedroom house in San Francisco goodbye!

    I was an S&P futures trader until the Nasdaq came along and the behavior changed around late 1998 or 1999. But I was still able to predict the exact days and size of the Nasdaq collapse move in early 2000 (though I did not trade it). My experience of speculator behavior allowed me to understand what people were thinking and doing. What made it interesting, is I was living in Silicon Valley at the time (Palo Alto and Half Moon Bay). So I had the exciting experience of going to the gym and pubs and overhearing people expressing the exact thoughts and discussing the exact behaviors I imagined them to have.

    Forex traders may trade the same setup many times in a week, or in a year. Stock speculators seem to all end up trading the same one rule one time, where the one trade lasts an entire cycle. But this guy is making a big deal out of something that is not a market collapse. What he is experiencing is more like the network-stock losses around 1997 (e.g. Ascend or Cascade).

  4. @N you can trade stocks with leverage too – and worse a stock can go to 0 a whole lot easier (and not uncommon) than FX on the reverse side your short can go to infinity. In FX at least in majors either of those cases would mean something a whole lot bigger than a stock and I think what your $ in fx are doing at that time would be the least of anyone’s worry. FX over stocks anyday.

  5. @adam: you’re a poet! i wonder if you write fiction on the side as a hobby. (not a sarcasm). you should as you are a great writer. (ok enough kissing up to the boss ;) )

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