In the mid-1990s, my wife, Angel, and I finally managed to save some money and were concerned about how we could provide a quality college education for our 2 children. Retirement planning was not yet a thought for us as we were doing well financially. We started our investment plan by attending some seminars held by local financial planners and actually started investing in mutual funds.

Then comes the start of the dot com years. We thought, “How hard can this be?” I was, at this time, working full time so my time was limited in what I could do. So I took what I thought would be the easy route. I started subscribing to everything. I joined multiple trading rooms at once and thought the answer was to just “hit the buy button”! I was tested under fire and found that my past success in other endeavors didn’t matter to the market.

During this 18-month period, my wake-up call came one day when my wife found me on my office floor curled up in a fetal position. She thought she had a heart attack! I looked at her and told her how I managed to lose around $10,000 on one trade in less than 2 hours. She was following random suggestions without knowing anything about how to operate correctly. By the way, the symbol for the stock was “CMGI” when it was trading at a high price during those years.

It was at this point that I knew I had to either stop trading or start learning about the market, the strategies and myself. Angel and I didn’t have the kind of capital account that could take a hit like that. At that time $10,000 was a lot of money to lose. I would venture to say that $10,000 is a lot of money for anyone to lose at any time on a single trade.

I had absolutely NO IDEA what a trading strategy or a stop loss was. I remember those days very clearly. My thought process during those moments before waking up and realizing what I really needed to do was, “Ok, I lost $10,000! So, I’m making $1,000 a day for 10 trading days.” Then when that didn’t work, I went back and said, OK, how about $500 a day for 20 trading days? You can guess that this thought didn’t work. So, I finally decided that I had to either learn to trade correctly or stop trading.

It was around 1998 when I really started to get serious about trading and embarked on my real journey after losing over $30,000! I have told this story to thousands of people during my talks over the last 11 years and people would come up to me and say, “Ron, that’s nothing… I lost XXX” and the amounts were often staggering. But $30,000 for Angel and I at the time was a LOT of money!

The focus points of this edition:

• Don’t think you can do this with a shotgun approach like I did!
• Anything worthwhile requires study and dedication!
• Don’t think you can outwit or outperform the market, it won’t happen!
• Build a plan to focus your efforts!

In the next issue, you’ll see how I approached my journey step by step, including one aspect that completely influenced my ultimate success…