After nine consecutive months of losses, Derek Huang finally had a green month. He made $4,800 in November. And it ruined him.
Derek had been trading options for almost a year. He had lost $23,000 across those nine months — a steady bleed of $2,000 to $3,000 per month. He had considered quitting multiple times. His wife had asked him to stop. His savings were eroding. His sleep was deteriorating.
But he could not quit. Because quitting meant admitting that the $23,000 was permanently gone. As long as he was still trading, there was hope. The $23,000 was "temporarily unavailable." If he quit, it became "lost forever." And his brain could not accept that.
So he kept trading. And in November, something clicked. He had three winning trades in a row. Then two more. By the end of the month, he was up $4,800 — his first profitable month in ten months of trading.
"I felt like I had finally figured it out," he said. "Like all the pain of the previous nine months had been tuition, and now I had graduated."
He had not graduated. He had gotten lucky during a low-volatility trending week where almost every directional trade worked. His "edge" was the market cooperating with random entries for seven trading days.
But Derek did not see it that way. He saw vindication. He saw proof that his approach worked. And he made the decision that would destroy everything: he tripled his position size in December.
His reasoning was mathematically seductive: if he could make $4,800 in November with his normal size, he could make $14,400 in December with triple the size. By January, he would have recovered a significant portion of his losses. By March, he would be even.
December was not like November. The market whipsawed. His tripled positions amplified every drawdown. A trade that would have lost $600 at his old size now lost $1,800. A trade that would have lost $1,200 now lost $3,600.
By December 31, he had lost $19,200 — more than he had lost in any single month during his nine-month losing streak. His account was down $38,000 total.
One green month. Tripled position size. $19,200 lost in a single month. The green month was the most expensive month of his career — because it convinced him to bet bigger.
Source: Journal of Behavioral Finance — "Escalation of Commitment in Trading" | Barber & Odean — "All That Glitters"
Why the First Green Month Is the Most Dangerous Month.
Here is what happens in a trader's brain after their first profitable month:
After months of losses, the brain is desperate for a narrative that makes the suffering worthwhile. When the first profitable month arrives, it provides that narrative: "The losses were tuition. I have learned. I am now a better trader." This narrative is powerfully reinforcing — it transforms months of failure into a hero's journey. You were in the darkness, and now you have emerged.
The problem is that the narrative is almost always false. One profitable month after nine losing months is far more likely to be variance — random fluctuation — than genuine skill improvement. But the brain does not process it as variance. It processes it as evidence of mastery.
And evidence of mastery leads to the same response every time: increased risk. If you have "figured it out," why would you keep trading small? The math says to size up. The ego says to size up. The desire to recover says to size up. Every voice in your head is screaming "MORE" — and the only voice that should be whispering "careful" is the system you do not have.
Research from the Journal of Behavioral Finance found that traders who increase position size after a winning period lose more in the subsequent period than they would have lost at their original size. The position size increase is the mechanism by which a normal drawdown becomes catastrophic.
Derek's December loss was three times worse than any previous month — not because the market was three times worse, but because his positions were three times bigger.
The System That Keeps Your Size Consistent. It Costs Nothing.
The tool that removes the temptation to size up after a winning period — the one that defines risk consistently on every trade regardless of your emotional state — is available free right now.
It is called DragonAlgo.
DragonAlgo sends alerts via Telegram every trading day with exact entries, stop losses, and three take-profit targets. The risk parameters are defined by the algorithm — not by how your last month went. Whether you are coming off your best month or your worst month, the stop loss is the same. The position sizing framework is the same. The rules are the same.
The algorithm does not know that you just had a green month. It does not know that you feel invincible. It does not know that your ego wants to triple your size. It processes data and outputs a signal with defined risk. That consistency is what separates traders who survive from traders who blow up.
| What Derek did | What DragonAlgo does |
|---|---|
| Tripled size after one green month | Consistent risk parameters on every alert |
| Confused luck with skill | Algorithm has no ego — just data |
| $19,200 lost in one month (3x normal) | Maximum loss defined before entry |
| No system to override confidence | Same rules whether up or down |
Trusted by thousands of American traders
What DragonAlgo Members Are Saying
"I did exactly what Derek did — had one good month and immediately doubled my size. Lost everything the next month. DragonAlgo's consistency saved me from ever doing that again. The risk on every alert is the same whether I am up or down. That is what I needed."
"Position sizing was my biggest weakness. After a win I would go bigger. After a loss I would go even bigger trying to recover. DragonAlgo broke that cycle because the alerts have defined risk built in. I cannot over-leverage a DragonAlgo signal."
Your First Green Month Is Not Graduation. It Is a Test.
If you have recently had your first profitable month — congratulations. But be very careful about what you do next. The temptation to size up is overwhelming and neurologically hardwired. The only defense is a system that keeps your risk consistent regardless of how you feel.
- One green month after multiple losses is more likely variance than skill
- Traders who increase size after winning periods lose more in the next period
- The green month is often the most expensive month in a trader's career
- DragonAlgo keeps risk consistent on every alert — regardless of recent performance
- Alerts delivered via Telegram every trading day with defined stops and targets
- The free alerts take 2 minutes to access
Derek's first green month did not save him. It destroyed him — because it convinced him to bet bigger. A system that keeps your risk consistent could have protected everything he had left.
Sources:
Journal of Behavioral Finance — "Escalation of Commitment" | Barber & Odean — "All That Glitters" | Kahneman — "Thinking, Fast and Slow" | DragonAlgo.com
Advertiser Disclosure: This is a sponsored article. MarketWire may receive compensation when you sign up through links in this article. All opinions are our own. Trading options involves substantial risk of loss and is not suitable for all investors. Past performance is not indicative of future results.