Lance Kardec Trader explains why traders blow up accounts right before reversals. They enter too early, get stopped out repeatedly, then hold losing positions emotionally until they're exhausted. When the market finally turns, they've already lost everything and miss the bounce.
I don't mean that to mock less experienced traders. I have done this mistake a million times. The truth is what most people are doing is they're buying here and they're stopping out. They're buying here and they're stopping out. Then when it stays steady and it's less capitulatory, they're still fighting it. Then they're like, okay, maybe rather than stopping out, I'm just going to hold on to some. Then it really accelerates and they hit out. Then they've just lost once. They've lost twice. They've lost 3 times. Then when the turn finally comes, they're licking their wounds. And even when I sometimes fight on the front side before the turn and and I'm buying and I take some losses, I still fight and struggle with those emotions. And I need to say, oh wait, Lance, like you're not waiting for the turn. And so people do this, even I do this, and I got to say, whoa, whoa, whoa. And that awareness only comes from experience. But that's what most people do is they're taking the losses on the front side and then they're losing when it capitulates and then they give up for the bounce.
