Millionaire Traderswas everything I had, and he put in$5,000 of his to top it off to
meet the account minimum, which I think was$10,000 at the time.
Q: So tell us about your very first trade. Did you do a lot of
research, or were you so excited about opening the account that
you just wanted to put something on for the sake of it?
A: No, I didn’t do much research, and I made probably every
mistake in the world because I couldn’t wait to put on the trade. I
mean that account couldn’t get opened up fast enough as far I was
concerned. Low and behold, of all things, I decided to dabble in
coffee. There was some type of crop report coming out on Friday
afternoon. So, on the day before, I took a position in coffee based on
what I thought was going to happen in the crop report. Right away I
made a host of mistakes, as I later realized that it’s very risky trading
before a crop report. You don’t do that, definitely not as a newbie.
To make matters worse, I had a midterm exam in marketing the
next day at NYU, and I didn’t understand all the orders at the time
such as stop-loss or limit orders, and most importantly I didn’t
understand what an OCO order was. It’s aone-cancels-other order.
I had this theory at the time that the crop report was going to be
bullish, the market was going to open higher, maybe two to four
cents, and I would get out. Alternatively, I would have a stop-loss in,
maybe two, three, or four cents below where the market was trading
in case it didn’t move in my direction. But I was worried that day. I
didn’t want to put it in and that was really stupid. I didn’t want to put
the stop-loss order and not take the profits because I was afraid that
it would go as high as my profit target, take me out of my position,
but then I’d get stopped out and end up with a new position. I didn’t
want to just put in the target without the stop and didn’t know what
a one-cancels-other order was and, as a result, I had no orders, just
an open position. So I took my exam, ran out of the exam hall to
the library, and found that coffee had opened two cents higher and
then went limit down after the crop report and I lost like$8,000. I
lost all my money and about$3,000 of my father’s. [Authors’ note:
Indi here refers to a very common trading order used in almost
every financial market—the OCO. One cancel other order allows