A User’s Guide: How to Gamble in the Stock Market and Lose Everything

Good morning! Got a great guest post for you today from a new blogger and friend in the space, Kalen Houck. I’m sure many of you can relate to this in some form or another – I know I can! And do NOT miss those days one bit, haha…

Take it away, Kalen!


Have you ever had to tell the person closest to you that you’ve failed them? That the hope and trust that they put in you was misplaced at best, and stupid at worst?

I have. And it sucks.

It was 2013, and I was married for 2 years at that point. My wife and I married in 2011, and I had lofty expectations of what our future would be like financially and the lifestyle we would live.

kalen houck wedding pic

But up until that point life had not lived up to our expectations. And if I’m being honest, I hadn’t lived up to my expectations.

I didn’t grow up thinking about creative work, building a business, learning a highly marketable skill like programming or sales, or spending extra time developing side hustles. So, I just settled on what life gave me.

Perhaps you can relate. Or maybe you’ve crushed it out of the park in every area of your life. But that wasn’t me. I knew that I was capable of more than the manual labor job that I was stuck in, and every day I was searching for my ticket-to-freedom.

The Radio Ad of Destiny

As I continued working, I was driving in my work truck and listening to the radio one day when I thought my ticket-to-freedom had miraculously appeared. An advertisement graced my ears for an organization that would teach you the secrets of trading in the stock market.

I like secrets. I had seen the Goonies. I knew that once you had the treasure map, glories and riches were on the other end.

goonies hey you guys

The radio commercial claimed to have the treasure map. It was EASY they said, once you knew the secrets. In fact, countless of their students had begun making thousands of dollars a day after learning their methods.

Thousands of dollars a day???

Shoot, I wasn’t making thousands of dollars a week. I couldn’t even fathom how my life would change with thousands of dollars per day.

So I went home and had a conversation with my wife.

“Hey darling,” (I knew I would have to sweet-talk her if I wanted to make this happen), “I heard this ad on the radio today and it sounds really promising. These guys will teach us how to trade stocks and make all the money we need.”

“Isn’t trading stocks dangerous?”

She wasn’t buying it. But I had all the right answers.

“Yes it can be…IF it’s done wrong. But they teach you how to do it correctly so that it’s safe. Trust me.”

Famous last words.

“How much is it?” she asked.

“Only $99 for a full day of teaching. And we’ll be set after that. Only $99 to change our family’s future.”

She reluctantly agreed. She’s always done a great job of trying to support me in my crazy endeavors.

Seminar Time

We showed up the following weekend downtown at a seedy hotel and were ushered into the conference room.

The main speaker was like a mix between Tony Robbins and Tom Cruise (the version that jumps on Oprah’s couch), and honestly looking back on it, the dude was an incredible salesman. We’ll call him Tony Cruise.

He explained how Wall Street works, how they are manipulating the system for their gain, and how the “little guys” like us can ride their coattails in the markets if we just follow along.

He went through the basics of stock trading that back then seemed like magic, but in reality (now that I’m more experienced) were just the basics of support and resistance trading.

Tony made it sound like the simplest thing in the world.

You take a stock chart (which I had never heard of before…that’s how green I was) like this:

You use your eye to feel out where the top and bottom of the channel is (because he explained that all big banks like to trade inside of these channels).

So then it looks like this:

stock chart channels

Then, and this is the “magical part”, you just trade within these channels and ride the coattails of the “big players”.

So when the stock is down near the bottom of the channel, you buy, and when it’s at the top, you sell.


stock chart buy sell points

After about 10 of these charts strung together in a crappy powerpoint slide, I was convinced.

I remember thinking, “I’m going to be rich!”

Tony went on to explain how an old lady (why does it always have to be an old lady?) had made $100,000 trading stocks using their method. If an old lady could do it, surely I would 10x her gains.

And Tony said he asked the lady, “Why didn’t you trade the options instead of the stock itself? If you were trading options, you would have easily made over $1,000,000.”

Say no more. Why waste time trading stocks when I could be trading options?

[Stock options are simply contracts to buy shares of the underlying stock at a specified price at a future date. They can be traded just like an actual stock and many people use them in trading because they provide leverage. Meaning for example you could spend $100 on an option contract expiring tomorrow, and could control $40,000 worth of stock.]

Little did I know that if something allows for greater return, it also means there’s a greater risk of loss. If someone is promising you a ton of return for very little risk, run the opposite direction.

Lesson 1: There is no free lunch

So Tony continued his presentation and at the end of the day (some of you more experienced folks may have guessed it already) he then pitched each of us his $10,000 trading program. He promised it would show us the ins and outs of trading so we could take what he taught us today and hit the ground running.

When he said $10,000 my jaw dropped open and my wife and I just stared at each other. We didn’t have $10,000 at the time. We didn’t even have half of that. We had a few thousand dollars to our name.

Tony started making the rounds through the tables where he performed his “hard close”. He came up to my wife and I, sat down next to us, and said, “Are you ready for your life to change?”

I said, “Man I’m going to be honest, I don’t have $10,000 to drop on this.”

He smiled, “No problem son, we can put you on a payment plan with minimal interest.”

How generous.

“I don’t know,” was all I could manage. I wanted this. I wanted my life to change. I wanted the freedom that came with a greater income. I wanted to make something of myself.

I looked over at my wife and gave her the puppy dog eyes. She rolled her eyes back at me.

“Let us talk about it,” I reluctantly told Tony. He moved on to the next table.

My wife and I talked back and forth for a few minutes. I tried to convince her that this was a good investment in our future. She tried to convince me that it was stupid to spend $10,000 we don’t have on a get-rich-quick scheme (she was always the more prudent one when it came to this type of stuff).

I eventually gave in and agreed with her. We had paid off her car a year before this and had avoided all debt since, and going $10,000 in debt for a stock trading program would have been a foolish endeavor.

Lesson 2: Get on the same page with your spouse

What I’ve seen often in marriages is that opposites attract.

One spouse might be the hard-driving type that has their foot on the gas pedal as hard as they can go, and the other spouse tends to be more cautious and prudent when it comes to decision making. Both types need each other.

Well, I’m more often the one in our marriage with elaborate dreams that I’m chasing. She’s the cautious one who enjoys the simple life. I need her “brakes” to keep me from driving us off the cliff, and she needs my “heavy foot” to get us out of the parking lot. Together we drive at a nice steady pace down the road toward our goals.

But that’s only after we’ve learned how to communicate better, respect each other’s opinion, and humble ourselves. Not an easy task.

So we told Tony, “no thank you” and left for the evening. I pouted on the way home because I didn’t get my way, even though I knew she was right. And for the rest of the weekend I kept thinking, “I know enough to do this on my own.”

Trading On My Own

I wasn’t able to convince my wife to go into $10k of debt for this trading program, but I was able to convince her to let me use our savings to dip my toe in the waters of trading – I promised her we wouldn’t lose money.

So I opened up a brokerage account, transferred the $3,000 in savings we had into it, and excitedly got to trading the very next day.

Yeah, you heard that right. I didn’t do any further training, didn’t have any rules (Brandon’s rules here are great), read any trading books, nothing. I transferred all of our savings into this account to trade with right away.

NEVER, I repeat, NEVER trade what you aren’t willing to lose.

I was not willing to lose all of our savings, but I just assumed that I wouldn’t lose. I had been taught the secrets after all.

Lesson 3: Only trade what you are willing to lose

I remembered that the guy said that options trading made way more money than stock trading, so I thought, “Why spend 5 years getting rich when I could do it in 5 weeks?”

I went all-in on options trading.

Now for those of you who don’t know, with options contracts (if you pick the wrong ones) they can be extremely volatile and can quickly go to ZERO if the trade goes against you. Meaning, you could buy $10,000 worth of options contracts in the morning, and if the trade went far enough against you, you could be left with $0.00 at the end of the day.

Very volatile, and not for newbies.

I didn’t care – I thought I was smarter than everyone else. Tony had taught me how to “trade like the banks”. I learned a skill in one weekend of looking at PowerPoint slides that Goldman Sachs’ traders spent years developing.

schitts creek eye roll

Lesson 4: Pride comes before the fall

I took my first trade the next day – the trade went against me. I held on thinking it would come back. It didn’t.

Obviously this was just a fluke, so I took another trade. It also went against me.

Not the kind of start to my stock trading career that I had envisioned.

1st day: -$480

In one day I had lost over 15% of my account. Not a good sign.

I blamed it on first day jitters. Surely my second day would be better right?

I didn’t tell my wife about the loss, because I just knew that I would make it back the next day.

My leftover funds settled the next day, and I took another trade in the morning. I checked it again in a few hours thinking that if I didn’t watch it, somehow that would help. Surely the stock would stay within this magic trading “channel” that Tony had described.

Nope. It went against my position as well. I closed it for a loss.

I took one more trade for the day. Guess what? Another loser.

2nd Day: -$355

I’ll spare you more of the depressing details and sum it up. Over the course of the week, I managed to trade away almost all of our entire savings until it was down to about $150. I had a few winning trades, but the majority were BIG losers.

In 10 days I lost 95% of our savings trying to get rich trading options.

10 Day Trading Profits: -$2,850

“WallStreetBets” would have been proud. I however, was not.

I had kept all of these losses a secret from my wife too, thinking that I would make it back. I thought, “Just one good win and I’ll make it back, then I’ll tell her and stop trading.”

Classic gambler’s mentality.

On my last day of trading after I was down to $150, I closed the account, and nervously sat around trying to figure out how to tell my wife that I had lost our savings.

There are not many worse feelings in the world than knowing that someone you love took a leap of faith on you, and you failed them.

There was no sense dragging it out any longer, so I sat her down and broke the news. She was shocked, justifiably upset, and felt betrayed.

That walk of shame is one that I never want to have to do again. And my wife would agree with that sentiment as well.

She forgave me (she’s amazing), I stopped gambling in the stock market, we built our savings back up, and I learned the beauty of index fund investing.

If I could go back and change anything about my experience with it all, I wouldn’t. I’m thankful that my life savings at the time was only $3,000 to lose and not $300,000, but either way that experience helped shape who I am today, how I manage risk in all aspects of life, and how I jump into new ventures.

It taught me so much about myself, about life, and about the real world.

I walked away knowing:

  • Never risk more than you’re willing to lose.
  • Make sure your spouse and you are on the same page.
  • Stupid decisions are only fatal if you let them be. You CAN bounce back from anything. Yes, I made a dumb decision, but 10 years later I can truly say that I’m better because of it.
  • If something sounds too good to be true, it is.
  • Pride comes before the fall. Humility is a great guard against foolishness.

Then and Now

I’ve continued index fund investing since then and let me tell you, it’s a way easier road.

Over the past few years I’ve also picked up trading again (with my wife’s genuine agreement this time). I’ve begun studying and learning how to actually trade profitably in the markets, and while I’m still refining my process, it’s a far different scenario than the gambler’s mentality I had 10 years ago. It can be done, but it’s very hard and requires a ton of work. Definitely not something you can jump into after one weekend.

The reality is that 99.99% of the population should follow J. Money’s investing advice, keep investing on a monthly basis until retirement, and sail off into the sunset with a hefty nest egg.

But for the 0.01% of us that desire to trade actively in the stock market for income (always stick to index fund investing with retirement funds by the way), you have to take it seriously. It’s a second job until you get the hang of it and can make it your primary job. It CAN be done, but it takes years of hard work in learning how to trade, lots of study and screen time watching charts, tons of trial and error, losses, and most of all a dedication to mental mastery.

If you truly want to learn, you need to spend a ton of time studying, start with “paper trading” so you aren’t risking any money, and then progress to risking $0.10 per trade, then $0.50, $1.00, and so on as you get better. Fall in love with the process of learning and improving, and you can do it. Try to get rich quickly, and you’ll fail faster than you thought possible – like I did.

And for the love of all that is holy, STAY AWAY FROM OPTIONS until you’ve been consistently profitable for a few years. That crap is dangerous.

Trust me, please.

A big “thank you” to J. Money for letting me tell some of my story here today. My hope is that you found a few life lessons and are reminded that everyone makes dumb mistakes sometimes – what matters is how you bounce back after getting the crap kicked out of you. You only lose if you quit.

Kalen is a husband, father of 4, personal finance coach, and writer on all things money. Drawing from a lifetime of both failures and victories, his mission is to teach people how to master their money and their life in the quickest way possible. He can be found at KalenHouck.com or on Twitter (@KalenHouck).

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  1. Impersonal Finances September 19, 2022 at 1:04 PM

    I think everyone needs to learn from that first bad experience and get humbled a bit before they’ll have any chance of future success. For me, it was $500 on penny stocks! Though I still jumped in after meme stocks this last go round haha. Lucky for you to have a supportive partner along for the ride!

    1. Kalen Houck September 19, 2022 at 1:52 PM

      Totally agree — humility is everything in the stock market! Knuckleheads like me have to learn the hard way :)

      And yes a supportive spouse made ALL the difference, for sure. 100%

  2. Jim September 19, 2022 at 4:44 PM

    Great post Kalen, It is eerily reminiscent of my life. I also have the prudent wife, whose happy with the simple life, while I have to be the one to complicate things. Though in my older age (51) I ‘ve been more content, and better able to recognize the value simplicity… If I can’t invest in something ‘passively’ for 5 years or more, I’m not interested, that’s kinda my philosophy these days!

    1. Kalen Houck September 19, 2022 at 5:17 PM

      That’s a great philosophy — and really cuts out all the noise of “shiny object syndrome”. I’m slowly maturing into that philosophy as well!

      And thank God for prudent wives — she’s saved me from more heartache than I know!

    2. J. Money September 20, 2022 at 7:11 AM

      Love that 5 year strategy, Jim!

  3. Dahliagirl September 19, 2022 at 9:59 PM

    I loved your post. It was a really fun read, and so relatable. It is silly how much we let future hopes and delusions of grandeur dictate our present behavior and override our “common sense”. It sounds like you got a good education in life. Next time I find myself at a seminar at a seedy motel, I will think of you and leave ;)

    1. Kalen Houck September 19, 2022 at 11:30 PM

      It was great education! Not fun, but it taught me a lot about my propensity for those delusions of grandeur you mentioned.

      If my story can save just one person from a seedy motel seminar, my work here is complete :)

  4. Katie @SolopreneurCafe September 20, 2022 at 12:39 AM

    I was so worried that you were going to commit financial infidelity for a moment there! Anyway, I’m pretty sure we all make an expensive mistake like this. Some of us made two. Ahem. Then along comes a really solid, trustworthy infographic about index funds, so you lick your wounds and hop back in :)

    1. Kalen Houck September 20, 2022 at 9:33 AM

      Index funds were like the recovery wing of gambler’s anonymous for me! I owe a lot to the abundance of those index fund infographics lol


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