You Lost Everything In The Stock Market? Here's What Paul Tudor Jones Would Say | Exploring Markets

You Lost Everything In The Stock Market? Here's What Paul Tudor Jones Would Say

People lose a lot of money in the stock market. Sometimes they lose everything. It can happen to both investors and traders. It also happens for a variety of reasons that include taking on too much risk, over-trading, making psychological mistakes, and buying speculative companies. But all is not lost. Here's what one of the greatest traders the world has ever seen says about losing everything in the stock market – it's happened to him, his friends, and other market legends:

“I think I lost $10,000 when I was 22, and when I was 25 I lost about $50,000, which was all I had to my name. I think it’s no coincidence that our greatest champions, our greatest artists, our greatest leaders, our greatest everything all seem to have experienced some kind of gut-wrenching loss. I think their greatness, in part, was fashioned on the crucible of that defeat. To a certain extent, I think that holds true in my field as well, and I am leery of traders who have never lost it all. I think that intense feeling of desperation that accompanies such a horrifically deflating experience indelibly cauterizes great risk management reflexes into a trader’s very being.

There are two unpleasant experiences that every trader will face in his lifetime at least once and most likely multiple times. First, there will come a day after a devastatingly brutal and agonizing stretch of losing trades that you’ll wonder if you will ever make a winning trade again. And second, there will come a point when you begin to ask yourself why it is you make money and if this is truly sustainable. That first experience tests an individual’s grit; does he have the stamina, courage, guts, and smarts to get up and engage the battle again? That second moment of enlightenment is the one that is actually scarier because it acknowledges a certain lack of control over anything. I think I was almost 38 years old when one day, in a moment of frightening enlightenment, I knew that I really did not know exactly how and why I had made all the money that I had over the prior 17 years. This threw my confidence for a jolt. It sent me down a path of self-discovery that today is still a work in progress.”