Last spring, when I went to find Old Yang, he was squatting at the entrance of the building materials store smoking. One cigarette after another, his hands were shaking.
The phone screen was lit up, the numbers glaringly bright, too painful to look at—1.5 million in principal, only 18,000 left.
"I originally wanted to make some quick money to turn around the business," he said with a hoarse voice, "but instead, I stepped into a pit."
In the first few days, the market had a slight pullback, and the account dropped from 1.5 million to 700,000.
He comforted himself: "Just hold on a bit and it will come back."
But the market never shows mercy. When it fell, he didn't cut losses,
instead, he kept averaging down, thinking of lowering the cost,
hoping that "as long as there is a rebound, I will exit."
As a result, the deeper he averaged down. After several reverse fluctuations,
the account directly shrank to 18,000.
At that moment, he finally panicked. Old Yang rubbed his red eyes,
his voice so low it was almost inaudible: "If it falls any further, I can only sell the store."
I didn't advise him on the market, nor did I mention any techniques.
I just asked one question:
"Are you trading now, or betting your life?"
He was stunned for a long time. In fact, Old Yang wasn't ignorant,
he knew the position should be controlled, and he knew he should leave himself an exit.
But every time the market moved, his heart got confused first.
A slight drop made him want to average down, and when he lost more, he was even more reluctant to leave.
It wasn't that he couldn't do the math, it was that he was unwilling to admit defeat.
Later he liquidated his positions and stopped, withdrawing the remaining money,
not touching it for a whole six months.
He said that after that time, he understood one thing:
The harshest part of contracts is not the fast fluctuations,
but that one misstep leads you to continuously make mistakes.
