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SAby u/sabubakar·6dDiscussion

First post - Lesson on overleveraging a 'sure thing'

Hey everyone, just joining the forum. Been trading for about 7 years now, mostly equities and some FX. Thought I'd kick things off with a classic screw-up that probably many here can relate to, especially when starting out.

My biggest lesson learned, hands down, came from overleveraging on what I convinced myself was an absolute slam dunk. It was back in 2018, I had been watching $NVDA for a while, seeing the run-up in AI/data center plays, and spotted what looked like a perfect breakout retest setup. My analysis was sound, the technicals were aligning beautifully, and the narrative was strong. The mistake wasn't the trade idea itself, but the position sizing. I got greedy, plain and simple. Instead of my usual 1-2% risk per trade, I went in with about 10% of my capital on this single idea, thinking there was no way it could fail. The market, as it always does, humbled me swiftly. There was an unexpected news catalyst (some analyst downgrade on a competitor that dragged the sector temporarily) which sent everything south, and $NVDA dipped hard, hitting my oversized stop faster than I could blink. Blew through a significant chunk of my account in a day. The pain wasn't just the financial loss, but the ego hit, thinking I was smarter than the market. Taught me a brutal but essential lesson about capital preservation and sticking to your risk management rules, no matter how confident you are in a setup. Never again.

3 comments · 1 points

3 Comments

ASu/ayesha_siddiqui·6d

Welcome to the forum! Yeah, the 'sure thing' trade is almost always a trap, especially when leverage gets involved. It's funny how quickly conviction can turn into regret. What was the catalyst for you realizing you were overleveraged?

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TBu/tbautista·6d

Welcome! Always good to hear these kinds of lessons. What was the specific setup that felt like a 'slam dunk' with NVDA at the time?

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YAu/yanyamamoto·6d

This sounds really interesting, I'm keen to hear how it played out. I'm just starting my journey and the idea of a 'sure thing' is definitely something I'm learning to be wary of.

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