Here is a note I got from a student:
“Started trading Options in Sept with $7500, was making good money in BA and LMT, so I dumped my Risk Mng, and bought 5 contracts for each. Account rocketed to $14,000, then, got my ass handed to me and fell off to $5300 !!! Haaaaa, Ouccchh, then as you advised, I put my “Pro Hat” on and started to watch my Risk Mangement like a PRO, now at $9003!!!
Thanks for helping me get my mind right, appreciate you Courtney.”
Bob raises some great points.
First, he starts to get a case of the Midas Touch Syndrome. This occurs when you have a run of profits and start thinking you don’t have to follow your rules. You just have to touch trades and they make a lot of money. But, of course, it doesn’t work that way.
Just because you made some money doesn’t mean you raised your IQ by 100 points!
Of course you can make a lot more money if you don’t use good risk management but breaking that discipline is nearly always a path to ruin.
Bob lived through the storm and was able to recover and put on his Pro Hat! Awesome!
It is important for us to always put on our Pro Hat and stop acting like an amateur. Pros make money and amateurs don’t. Good for Bob!
I love the fact that Bob was able to raise his account by almost 80% after putting on his Pro Hat. Awesome!
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