What I Learned Losing A Million Dollars by Jim Paul and Brendan Moynihan

If you ever wondered what it feels like to lose over $1 million trading commodities, here is a unique book that gives you all the gut-wrenching details. But the main purpose of this book is to help you learn from the author’s mistakes, so this doesn’t happen to you, or you prevent it from happening again.

What I Learned Losing a Million Dollars is a real life story of a commodity trader who was on top of the world through his successes, but that all came tumbling down in a hurry as it was all based on the false belief that he couldn’t lose when it came to trading commodities.

What I Learned Losing a Million Dollars begins with some background on the author’s pursuit for a better life and how a series of personal accomplishments gave him a somewhat false sense of security that success in trading commodities was a forgone conclusion. As the events unfold, it is painful, yet entertaining to see how someone could lose $1.6 million trading commodities in a short period of time and have his life turned completely upside down.

The fact is that the author did not have a trading plan and he didn’t know as much about trading as he thought he did. He basically risked everything on one highly leveraged trade. That may have worked in the past, but it is just a matter of time before the markets caught up to him.

Trading without a plan and a lack of risk control will only get you so far. You may think that are you are an expert trader, but you are just lucky and it is only a matter of time before one disastrous trade inflicts its misery upon you.

The author realizes this only after the fact. When he tries to get back into the trading pits, he comes to the realization that he cannot trade successfully. He had been relying on others for his trading success, mixed in with some luck. At this point, I’m sure many who read this book will see a little of themselves here. They can probably relate to his story and many probably have a similar story, but on a smaller scale.

The author then seeks wisdom. He commits himself to learning everything he can about trading from the experts – Jim Rogers, John Templeton, Warren Buffet, Paul Tudor Jones, W.D. Gann and many others. Needless to say, there was no common denominator here for a Holy Grail system and the research was conflicting at best. So, he takes a new approach and he focuses on why traders lose money. This is the heart of the book.

There are several books on the psychological aspect of trading, but What I Learned Losing a Million Dollars provides very in-depth and personalized research on why traders lose money. This is not a bunch of babble coming from a psychologist who has never traded commodities. This analysis is coming from someone who actually lived through the ordeal and was able to commit himself to finding an explanation to this problem that has plagued commodity traders for centuries.

The author took an honest look deep inside himself to find out what his motivations were in trading and why things went drastically wrong. Was he trading to be right or trading to make money? Ask yourself this same question: Am I holding on to this miserable, losing position that might wipeout my account, so I can prove that I was right? Do I only listen to the news and opinions that support my position and ignore the real facts? Unfortunately, some people just can’t take a manageable loss and their accounts suffer the inevitable fate.

What I Learned Losing a Million Dollars also delves into in-depth discussions on crowd mentality, gambling versus speculation and the need for a trading plan with risk control measures. If you are new to trading, let this book serve as an example of what can and will go wrong. Also, this book should serve as a guide to put you into the right frame of mind to trade commodities successfully.