Page 21 - THE MARKET WHISPERER

20 Foreword

SMART Behind every stock exchange transaction, there are two
MONEY parties: the pro and the idiot. But sometimes, the idiot
lucks out!

I was glued to the computer screen, counting anxiously, watching every

movement of every cent. Suddenly, when the stock went up ten cents, I

got scared it would drop down again, and I pressed the sell button. Idiot!
TEVA climbed $1.50 over several hours. A potential profit of $1500 ended
up being a mere $100. Never mind. Not so terrible for a first transaction. I
convinced myself that I was pleased as could be.

Then, suddenly, doubt rose in my mind: did the sell order really go

through? I knew I’d hit the sell button, so why did the trading platform still
show those 1000 stocks in my account? To be on the safe side, I hit the sell
button a second time. Whew! Now it indeed seemed like I’d succeeded.

My heart rate slowly returned to normal, and I took a drink of cool water.
Three minutes of effort, and a profit of $100. What a financial genius I was!
Not bad at all for my first effort as a trader. Or so I thought…

I celebrated my success and opened the trading platform again an hour

later. To my horror, I discovered my account showing a loss of $400 caused
by a “short trade” of 1000 shares. What on earth was a “short”? From the
little I knew, a short was a method for profiting from a dropping stock.

What I couldn’t figure out was how the devil I got into this, and how to

get out of it. Meantime, TEVA continued to move up like a rocket shooting
for the moon, and for every cent it climbed, $10 was being wiped from my
account! Not a happy moment.

I did know that being in a short with a stock running up is not a good idea

at all. Pressure, sweat, a day’s salary gone in an hour, TEVA not stopping to

breathe for even a moment, and my trading account evaporating before my

eyes! What should I do next?
I phoned the broker’s client service center. After some nerve-wracking

Muzak-filled minutes, my answer came through. Apparently, to exit a
short of 1000 shares I needed to buy 1000 shares. I bought and closed
the platform. What a relief. Later I understood the sequence of events:

when I had sold the first time around, the trade platform had not updated
immediately, making me think the sale hadn’t gone through. But it had; so
that when I pressed the sale button again, I was actually telling the system,
“I’ve just sold 1000 shares I don’t have.” That put my account into a “short.”
But don’t worry, we’ll learn what that is later in the book.

My first day of trade ended in burning failure. Score: 1-0 for the market.