How to lose 7 figures in 2 weeks
Things started going downhill in late August. I started sizing up beyond anything I had done before. I was taking trades into the 8 figures, which I had never done before. At the peak I was trading 15~20MM size. But this alone wasn’t the problem. I reached a net worth all time high right when I started sizing up, but as typically happens with major profit milestones, I quickly retraced my net worth slightly, but I was unable to let go of that previous pnl milestone. And so began the downfall. It started slowly, with worse and worse trades, but at the same oversized 8 figures positions. Fees were getting terrible, slippage insane. Flip flopping at that size easily costs 20~30k in slippage, fees and any small loss. That adds up quick. During this time I did have some nice wins, but that only added to my complacency and denial of the reality of the situation.
Things weren’t too bad until we started approaching 50k in early September. “The obvious move is never made easy.” The obvious move, in this case, was a breakout. And yet we chopped for days, teasing a breakout, just to swing the lows in the 49keks again. Breakout trading a break of a magnet level is rarely a good idea, especially if it doesn’t work the first time. But I had already given up a good amount of money to the market, and felt entitled to catch the breakout. “At this point, I deserve to at least get the win.” Well, I did get the win, and I did TP before the nuke, thankfully. But that doesn’t justify the trading I did during the days / week before we finally broke out.
Then we nuked. I tried to catch the knife at 48k, but stopped myself out around 45~46k. I lost a good amount but honestly I actually think I handled that loss pretty well. I caught the bounce after we bottomed and made back most of the money I lost on the stop. I also jumped into a huge $FTT long. Why? I don’t really no. At the time $FTT had been teasing breakouts and looked pretty primed. And it did take off, but I never TPed. I round tripped deep 6 figure pnl on $FTT like 3 times. And again, at this point I felt like the market “owed” me the win. “I already round tripped, at this point I might as well go for the moon.” So now I am holding an oversized $FTT position with 3 figure targets. Great. I don’t even trade alts ffs.
Well, eventually I capitulated that position. At this point $BTC was basically a slave to the S&P / China FUD. I chopped myself some more and then continued to take the same oversized trades. At this point I had fully acknowledged I was trading on tilt. And yet I kept trading. That amount of money I lost from when I acknowledged I was on tilt, to when I actually stopped trading is disgusting. Huge lesson here.
Anyways, eventually I did stop. All in all I lost a bit over 50% net worth. Pretty brutal. Worst since 2019 for me probably. The good news is I’m still up huge multiples this year, and this is absolutely recoverable. While I didn’t stop soon enough, I did stop. And that is the only reason I can still even play the game.
October I am going to trade small. Focus on building back confidence, on winning trades. Forget trying to make some amount of money. Definitely forget trying to “make it all back.” Instead, the goal is to take good trades with small size and see how far that can take me.
