{"id":39074,"date":"2014-10-11T11:31:08","date_gmt":"2014-10-11T15:31:08","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=39074"},"modified":"2023-03-29T15:12:46","modified_gmt":"2023-03-29T19:12:46","slug":"anatomy-of-a-rip-2","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/anatomy-of-a-rip-2","title":{"rendered":"Anatomy of a Rip &#8211; Part II"},"content":{"rendered":"<blockquote><p>Hey Mike,<\/p>\n<p>I hope that all is well and that you survived a week that in our industry, will not soon be forgotten. I attended last night&#8217;s webinar and wanted to thank you for a great session.\u00a0 I believe that no matter how long we&#8217;ve been in this business, there are days when obstacles to success appear\/reappear when we least expect them.\u00a0 I have learned (the hard way) that it is crucial to to identify these obstacles as soon as we&#8217;re psychologically able as both transient and rectifiable.\u00a0 To re-frame a tough trade\/day\/week\/etc, takes discipline, self-awareness, and most importantly, humility.<\/p>\n<p>It was fortuitous that <a href=\"http:\/\/www.smbtraining.com\/blog\/smb-dna-program?inf_contact_key=9e990aa5ef87ba153365b4541cf3259a\" target=\"_blank\" rel=\"noopener noreferrer\">the webinar<\/a> fell on the exact day that I took my biggest rip since 2010.\u00a0 The worst part about the rip is that I simply made an execution error by not using my tried and true presets.\u00a0 I am bionic in this regard, but turned off &#8220;the robot&#8221; for this trade.\u00a0 I have presets established that in the normal manner of execution, preclude me from entering without OCA orders for target and stop.\u00a0 On this particular occasion, I simply entered too quickly via a different order entry method and left myself vulnerable; no target, no stop. \u00a0(This was an FOP trade on the\u00a0Dec 14\u00a0CL contract).\u00a0 You can guess what happened next&#8230;\u00a0 By the time I spotted the error, I was down 3X my loss tolerance for this type of instrument and what resulted was my biggest rip in over 4 years.<\/p>\n<p>So what do I take away from an experience like this?\u00a0 A bruised ego?\u00a0 A resentment against derivatives?\u00a0 A belief that my platform or broker must be behind the rip? I&#8217;d be lying if I said that I never thought\/felt these things in the past 6 years or so, however on this occasion I choose to see this rip as an opportunity to re-focus and pay more attention to detail. I made the mistake and accept responsibility for it; no excuses.\u00a0 I&#8217;ll make sure that it doesn&#8217;t happen again.\u00a0 Period.<\/p>\n<p>I love my job as an independent trader\/investor and know that I&#8217;ve found my true vocation after many jobs that held little intrinsic value.\u00a0 There is always something new to learn and quite often, we need to be reminded of something that we learned in the past. This was one of those occasions. A wise Hawaiian (A tour guide on the Road to Hana tour) once warned me to &#8220;never turn your back on the ocean.&#8221; \u00a0On this occasion it is useful to re-purpose the aphorism to remind us that the market, much like the ocean, has immense power and can take us down if we become lackadaisical or complacent.\u00a0 Anyone who successfully makes a living in this business knows that one of the keys to prosperity is the ability to lose properly and on your own terms.\u00a0 If we let the market decide, the next big rip is just around the corner.<\/p>\n<p>I hope that this &#8220;anatomy of a rip&#8221; can help someone out there remember that sometimes we have to lose to win, and being able to do so can be the difference between success and failure.<\/p><\/blockquote>\n<p><strong>@mikebellafiore<\/strong><\/p>\n<p>I have made this same mistake myself. \u00a0If you haven&#8217;t you will. \u00a0This year one of our experienced traders took a 6k rip (large loss) doing exactly what Trader Chris did above. \u00a0I took one for a bit more.<\/p>\n<p>I love how Trader Chris wants to learn from this mistake. \u00a0His solution is to improve his attention to detail. \u00a0This is an excellent solution. \u00a0As I wrote to Trader Chris in my response email: <em>This increased attention to detail will, in the end, make you much more than this painful rip<\/em>. \u00a0It may not seem like this rip will be good for your trading today but in the near future it will be.<\/p>\n<p>Now having said that&#8230;.trading is a performance sport. \u00a0We cannot make execution errors. \u00a0Just acknowledging your mistake is not enough. \u00a0You must take the steps to improve and you must in fact improve. \u00a0Well you do not have to improve&#8230;.there is always the alternative- elimination.<\/p>\n<p>A huge thank you to Trader Chris for his transparency and for sharing his market lesson with the trading community.<\/p>\n<p>* To watch that webinar Trader Chris attended watch <a href=\"http:\/\/www.smbtraining.com\/blog\/smb-dna-program?inf_contact_key=9e990aa5ef87ba153365b4541cf3259a\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>HERE!<\/strong><\/a><\/p>\n<p style=\"text-align: center;\">\u201cYou can be better tomorrow than you are today!\u201d<\/p>\n<p>Mike Bellafiore is the Co-Founder of SMB Capital and SMBU, which provides trading education in stocks, options, forex and futures. Bella is the author of<em> One Good Trade<\/em> and <em>The PlayBook<\/em>. He welcomes your trading questions at mbellafiore@smbcap.com.<\/p>\n<p>no relevant positions<br \/>\n<a title=\"DNA of Successful Trading\" href=\"https:\/\/tradingworkshop.com\/\" target=\"_blank\" rel=\"noopener noreferrer\"><img decoding=\"async\" style=\"\u201dwidth: 600px; height: 227px; border: 0;\" title=\"DNA of Successful Trading\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2014\/01\/bellabanner.png\" alt=\"DNA of successful trading banner\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Hey Mike, I hope that all is well and that you survived a week that in our industry, will not soon be forgotten. I attended last night&#8217;s webinar and wanted to thank you for a great session.\u00a0 I believe that no matter how long we&#8217;ve been in this business, there are days when obstacles to success appear\/reappear when we least &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/anatomy-of-a-rip-2\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[4157,1166],"class_list":["post-39074","post","type-post","status-publish","format-standard","hentry","category-general-comments-2","tag-anatomy","tag-rip","no-post-thumbnail"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Anatomy of a Rip - Part II | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/anatomy-of-a-rip-2\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Anatomy of a Rip - Part II | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Hey Mike, I hope that all is well and that you survived a week that in our industry, will not soon be forgotten. I attended last night&#8217;s webinar and wanted to thank you for a great session.\u00a0 I believe that no matter how long we&#8217;ve been in this business, there are days when obstacles to success appear\/reappear when we least ... 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