Alice:
I’m still scratching my head—how did we both lose money when one of us was supposed to profit?
We picked the same stock, same trade size, but opposite directions. I guess neither of us planned for this outcome.
Ben:
Right? I was convinced the stock was topping out and went short. You were certain it would rally, so you went long. We both thought one outcome was locked in. In hindsight, we both jumped in without a clear trading plan – no defined entry rules, no stops or targets. That’s a rookie mistake. Good risk management starts before you hit “buy” or “sell,” with a plan for profit-taking and cutting losses. We didn’t do that.
Alice:
Exactly. We were trading on gut feel. Instead of setting a stop-loss or profit target, I just assumed the move would keep going my way. If we had stopped to plan – figure out what to do if it went against us or for us – maybe we’d have handled the swings better. We even ignored scaling in smaller. We both risked too much on one trade. Like Brett Steenbarger points out, controlling bet size is crucial. If you keep each loss small, you give yourself a chance to trade again and see if the idea still works. We didn’t give ourselves that room.
Ben:
Yeah, I over-leveraged thinking “this one’s a sure thing.” That was greed. I was thinking maybe I could double down if it dipped, instead of just sticking to a plan. It was classic confirmation bias – I only listened to bullish headlines, shut out anything bearish, and convinced myself the price would snap back as I expected. You did the same but in reverse. We were both so emotionally attached to our sides, we ignored the other side of the story.
Alice:
We let our emotions drive us instead of facts. I was so scared I’d miss out that I kept adding to my long when it rallied, and then panic-sold when it turned down. Greed took over: as one trading guide says, “Greed leads traders to chase bigger wins and fail to take profits off the table.” I was watching it run and thinking “just a little more, just a bit more,” and then boom – it snapped back and wiped out my gains. I should have taken a smaller profit earlier.
Ben:
I did the opposite – I was scared to hold on to a losing short position, so I set a stop too tight. When the stock spiked up, I got stopped out, and then it came right back down again. I lost more on the re-entry. In the heat of it, I ignored logic. It’s like Kahneman’s System 1 brain kicked in – reacting fast and emotional. We should’ve engaged our “slow thinking” more, stuck to rules. I think I was looking at charts and whispering to myself, “This isn’t how it should work,” until I’d rationalized ignoring new info. Again, confirmation bias; if something didn’t fit my bearish narrative, I ignored it.
Alice:
It was a perfect storm of bias and greed. Honestly, it reminds me of something Mark Douglas taught: the market is random in the short run, and any outcome can happen. We acted like one of us was guaranteed to win, but Douglas’ wisdom is that even perfect setups can fail. We got emotionally attached to our ideas instead of treating each trade as a probability. We thought we knew where it would go, but really we didn’t know squat. Each trade outcome is random; the only edge is how we manage it.
Ben:
True. And we also forgot the big picture: trading this aggressively. It’s just an extra income channel for us, not our full-time pension. We were treating it like we needed it to pay rent. Tradingbells summed it up: trading can be a way to make extra cash, but it’s not a quick road to riches. We should have viewed this more as a game or side hustle, not something to bet the house on. When each trade feels make-or-break, fear and greed take over. That’s why it’s so important to only use money you can afford to lose and never expect trading to be your main income stream.
Alice:
Right. If we had smaller risk, even if we were wrong, it wouldn’t have hurt as much. And if we’d taken some profits here or there, we might’ve broken even or even made a bit. Instead, we let that greed-and-fear loop dictate our moves. Looking back, the key lesson is: plan every trade in advance and then stick to the plan, manage position sizes carefully, avoid chasing or overholding, and always remember it’s not guaranteed money. A quote that comes to mind: “Anything can happen in the market. You don’t need to know what’s going to happen next to make money.” We thought we did, and that was our downfall.
Ben:
Agreed. We got too greedy for the win and blinded to the risk. Next time, let’s write down a clear strategy – entry, stop, and profit target – and stick to it. Keep emotions out, keep positions smaller, and view this as just a part-time side project, not a livelihood. Not being too greedy really is the key.
Alice:
(smiles) Well, at least we learned a valuable lesson over coffee and not over our remaining account balance.
Ben:
Cheers to that—onwards and more cautiously, I guess.
