Com'on - Listen to the so-called guru's advice

Read the following in a local forum with interest of how silly and naive aspiring traders can be:

"I am a newbie and just started trading few weeks ago. I thought I got some good information from this forum and won some money initially. One particular forummer caught my eyes as he was very articulate and claimed he was right of the market movement for the past few months..2 weeks ago on a friday, when the market turned, I listen to his advice and go long, becos he sound to firm and sure abt the position..never did I expect he flip his position so fast on the coming monday..Now i suffered for a lost of $10450..very sad now I never lost such a huge amount in my life..and the above was my entire saving..I am keeping this away from my wife over the weekend and now feel very depress and lost"

Hey, in the first place, a few lessons we can learn from this poor chap's mistake:

1. Treat someone's opinion as a fact is fatal because a trader can turn his opinion in a split second. Since he is not giving you any advice, he owes no fiduciary duty to you. If you are wrong, it is your own mistake and you have no legal recourse against this guy. So, don't even think of suing that trader? No way, you are wasting your money and your lawyer will happily pocket the legal fee.

2. Never trade with the amount you cannot afford to lose. So, if you hear like this guy say "I suffered a loss {sic} of $10,450 ... I never lost such huge amount in my life", probably he is trading too big and thinking that this trade would be a home run. Once you are in the mindset of gambling, chances are you are asking how much this trade can make, and not how much you will lose if you are wrong in the first place. That's why gamblers can sometimes make money but in the long run, gamblers can't last. Probability is not on their sides anyway.

3. This is really a joke but is so common. So many people are not willing to pay a few K to get proper education because they say the instructors suck, the course sucks, the materials suck, the strategy does not work. Ironically, they are happy to pay so much money to let Mr. Market teach them a good lesson. You can call this moral hazard, or the law of adversity. Isn't it better to pay $10k for proper education and learn how to trade well and last longer, instead of paying $10k to Mr. Market and now the money is gone. This poor guy literally has less than $10k to start his trading business. He felt sad and probably he wouldn't trade anymore because humans are scared due to "once bitten, twice shy" syndromes.

Another victim ....