I don’t exactly think of myself as a rookie daytrader anymore, but I also don’t partake nearly as much as I used to either. I’ve developed a much more deliberate and calculated investment strategy. I’ll set a goal, reach it, and then just let that investment sit. But, this dude I’m writing about today…man….this is the dream.
How many of you out there are like me, sitting at my desk, dreaming about the day one of my investments takes off? I sit here and think about what I would do with the money. There’d be our ticket to SoBros HQ and running this ship full-time instead of late at night and early in the morning. I might buy a giraffe. I don’t know.
For this guy, though, it wasn’t all sunshine and rainbows.
Harouna Traoré, who used a demonstration version of the Valbury Capital brokerage platform “to become familiar with the basics of trading”, before eventually building up the courage to open a live, €20,000 account last summer for the occasional “real” trade.
This is when things got interesting: as the FT reports, shortly after opening the live account, he was practising trading at home on what he thought to be the demo version, placing massive, €1bn trades for European and US equity futures, before realizing that it was the live platform and he had run up a loss of more than $1 million.
What does that realization feel like, I wonder?
It has to be like Ron Burgundy jumping into the bear pit. “I have made a huge mistake. I immediately regret this decision.”
How do you NOT make sure you’re using the practice app and not using real, live money?!?! I mean, that seems like an inexcusable offense if you’re a grown ass man, and have any experience with technology whatsoever. Like, if you can use a microwave, you should have the wherewithal to think, “maybe I should double and triple check that I’m not using $1 million in REAL MONEY.
Thankfully, he was able to dig himself ou…
Now he wouldn’t be the first amateur trader to fall into a deep hole by trading without knowing what he was doing; however, we may be one of the very few who continued trading and managed to not only dig himself out of the hole, but to eventually build up an even bigger, $5 billion position – rapidly approaching Jerome Kerviel levels – in S&P futures while turning the original loss into a profit of more than €10 million!
“I could only think of my family,” said Traoré, who is married with two children. “I was stressed.”
The dude turns a million dollar loss into a $10 million profit. Unbelievable. This is like betting on the Cleveland Browns to win the Super Bowl, and then the Cleveland Browns win the Super Bowl.
That is clutch. That is what the panic of losing a million dollars will do to you, I suppose.
And then, inexplicably, having made $10 million in profits – even though it was almost literally by throwing darts at a dartboard – he called Valbury several days later to explain what happened, at which point the brokerage told him he had breached his contract and his positions were “void and cancelled.”
Womp womp. Turns out, the brokerage wasn’t very happy with that $10 million profit. He ended up suing them and now it sounds like an absolute mess. Rest assured, though, that if the tables were turned, that brokerage would be coming after this dude’s $10 million. But, that’s the game. That’s the chance you take when you get into something like this.
And, really – let’s let this serve as a reminder to everyone out there who may be reading this and is either thinking about investing or is a rookie investor: BE FUCKING CAREFUL.
Stoney Keeley is the Editor in Chief of The SoBros Network. He is a strong supporter of Team GSD and #BeBetter. “Big Natural” covers the Tennessee Titans, Alabama Crimson Tide football, the WWE, and a whole wealth of nonsense. Follow on Twitter @StoneyKeeley
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