Author: Chris Flores, Founder | March 17, 2025
When traders get together, we love sharing war stories. The near misses, the perfect entries, and especially the catastrophic losses that somehow became valuable lessons. Today, I'm sharing my biggest trading mistake one that cost me $18,700 in a single day but ultimately transformed my approach to the markets.
The Setup
It was spring 2021. Markets were frothy, and everyone seemed to be making money. After a few successful options trades on tech stocks, my confidence was at an all-time high (red flag #1).
A major semiconductor company was about to report earnings, and based on my "thorough research" (reading Reddit threads and watching YouTube analysts), I was convinced they would smash expectations. The supply chain issues everyone worried about? Overblown. The competition? Not a threat.
I had turned $3,000 into roughly $24,000 over the previous two months, and I was ready to make what I called my "definitive trade."
The Fatal Flaw
Instead of sticking to my previous position sizing (which had been working), I went all in. I put about 80% of my account into call options expiring just two weeks after earnings. My reasoning? "This is such a sure thing that I'd be leaving money on the table if I didn't maximize my position" (red flag #2).
I had no stop loss planned because "I'd just average down if it dipped initially" (red flag #3).
The Aftermath
You can probably guess what happened. The company actually beat earnings expectations... but guided lower for the next quarter due to you guessed it supply chain concerns. The stock dropped 14% after hours.
By the time I could react the next morning, my options had lost 78% of their value. In a panic, I held on, hoping for a recovery (red flag #4). The stock continued declining over the next week, and my options expired nearly worthless.
Just like that, $18,700 vanished. I was back almost to where I'd started two months earlier.
The Transformation
After spending a week feeling sorry for myself, I sat down and analyzed every decision I'd made. What I realized was that I hadn't really had a trading system I had a gambling problem disguised as trading.
This catastrophic loss forced me to rebuild my approach from the ground up. Here's what changed:
1. Position Sizing Became Non-Negotiable
I implemented the 10% rule no single trade can risk more than 10% of my total account value. This simple rule has saved me countless times since.
2. I Developed Entry and Exit Criteria
No more "feelings" about a stock. Every trade now needs to meet specific criteria before I enter, and I have predetermined points where I'll exit whether for a loss or a profit.
3. I Started Tracking Everything
The "Journal" in BTD Journal became literal. I track every trade, every emotion, and every market condition in a detailed log that helps me identify patterns in my behavior and the market.
4. I Learned to Embrace Being Wrong
The most successful traders aren't right more often they just lose less when they're wrong. Learning to cut losses quickly and without emotion was my biggest psychological hurdle.
The Result
These changes didn't make me an overnight success, but they stopped the catastrophic losses. My win rate actually decreased (from about 60% to 55%), but my risk/reward ratio improved dramatically. My average winner became 2.3x larger than my average loser.
The "I Bought The Dip" shirt was created shortly after this experience—a reminder to myself that even the most promising setups can fail, and position sizing matters more than being right.
Your Turn
Every trader has their own version of this story. What was your biggest trading mistake? What did it teach you? Share in the comments below or join the discussion in our Discord.
Remember: In this game, survival is the first priority. You can't compound returns if you blow up your account.
For those interested in the system I developed after this disaster, check out our Trading Blueprint. It's the exact framework I wish I'd had before making this $18,700 mistake.
—Chris