In the spirit of celebrating our 17 year anniversary on Saturday I began to reflect on the journey Steph and I have been on over the years. I met Steph on the trading floor at the Chicago Board of Trade (CBOT) back in 1991 and two years later we were married on December 11, 1993. Steph was working for two college friends of mine at the CBOT and one day when I was visiting them on my break from the 30 Year Bond Pit, they introduced me to her. Ever since then we have been joined at the hip. I have always joked with Steph over the years that our, or should I say my, maturity level matches the amount of years that we have been married. Well last year we were old enough to drive (16 years) and this year we might even be seen driving with one hand on the wheel. No “texting” and ‘Bluetooth only” but driving the roads with some confidence. I’m not surprised that we are still joined at the hip today but to still be involved in the trading industry, trading forex, futures and educating, I don’t know if I would have guessed it. We love the industry but starting in the business at 22 years old, you never think you will find a career that sings to you right out of the college gates.

If you are a frequent reader of our articles you know there is going to be a trading lesson in my thoughts somewhere. When I was reflecting about being married and then thinking about trading, it reminded me of a saying we use to describe a trader that won’t admit his/her mistake by hanging onto a losing trade. We call this “married to a trade”. “Married to a Trade(r)” and being with Steph has paid many dividends over the years, but being “Married to a Trade” takes on a whole different connotation. When we educate traders who are unwilling to get out of a bad trade we ask them, “What makes you “marry a trade”?. Most shrug their shoulders and say “I don’t know”. With my years of experience I calmly tell them they are not alone and they have fallen victim to the overwhelming problem that all traders face at one time or another in their career. Going further I explain that nobody likes to admit loss and we have some work to do and some bad habits to break!

I often share with my clients a personal experience I had in my early trading days in the 30 Year Bond Pit. My plan was mapped, my strategy was in place and it was time to execute a trade. I wanted to get short (sell) and I entered at 06. The entire price isn’t relevant as I believe you will get my point soon enough. From my entry I said to myself I am wrong if prices climb above 10. Well you guessed it, prices soon were trading 11 and being the competitive person that I am, I didn’t want to admit my loss and I did the unthinkable, which we coined the “More-On Trade”. We say this to traders when they add to a position in the same direction when they already told themselves they were wrong, or in other words, you are a “Moron”. I sold 16’s, prices still climbed and I finally admitted my mistake up at 26. It cost me just under $1,000. Frustrated, I walked out of the trading pit and took a walk outside the CBOT walls. As I walked out the front door on LaSalle and Jackson, around Wells and VanBuren under the El tracks, I told myself that if I continue to go against my plan and act like that I will not be here next year. My internal scolding worked and I was grateful at this point for my competitive spirit as I had the ability to back-off, regroup, come to a solution, learn from my mistake and go after it again.

So when I sat down with one particular client/trader and looked over his trades, I asked him what was the point when he truly felt that he was wrong on these ideas. When we uncovered those areas, we then took it a step further and added up the dollars that he would have saved if he got out at that initial point where he said he was wrong. All said and done he could have bought a brand new car and put $100,000 down on a house. Needless to say this corrected a few issues for him. I told him when I began to admit loss at my planned out price, if things went bad, I made the money back tenfold. When you clear your head of the mistake and get out, you can see the action clearly again. Planning where you are getting out of the trade before you get in (especially if it goes bad) and ACTUALLY EXCITING when it happens will save you thousands if not millions down the road. It feels very liberating when, and if, you can get to this place. Luckily this trader had the money to continue as most don’t. You don’t want to be the next Nick Leeson and take down a bank or even an economy. So when you feel you are falling victim to being “Married to a Trade” take my advice marry a person or “Marry a Trade(r)”, not a trade.

Whatever you decide to try; you can’t win, if you don’t play!! Prosperity is at your fingertips! All you have to do is grab it!!