Facebook took one of the most epic nose dives of the year if not for the decade. To me, it seemed to dive just based off panic selling/stop loss limits. The earnings report really wasn't even all that bad. The company made tons of money and was just a few percentage points away from the estimated earnings/share. Still, this was more than enough to send this stock spiraling out of control into chaos. And being a new trader, I made a mistake.

Oh no! The title of this post is referencing holding a stock into an ER. You must have wiped out your account! Me being a noob, this is a great assumption. After all, Market Watch posted a story about Dennis Cao, a 24-year-old software engineer, who lost over $180k in FB stocks and over 40% of his account. *GASP*

As Tim and many other traders have said over and over, never trust holding into an ER. The fallout is just not worth the potential earnings. You don't know how far the floor will drop. I almost bought FB stock prior to the ER but restrained myself and held off. I thought at worst, the stock price would drop from ~$219 to around $200/$195. I was severely wrong as it dropped almost 25% down to $155. And this is where I made my mistake. I entertained the idea of holding into an ER and massively underestimated the downside potential.

So, there are two lessons to learn here. First, do NOT hold into ERs. It's just not worth it. There's too much speculation and downsides. Even if the ER is good. Second, be careful how much money you put into your stocks. You can wipe out several years’ worth of growth off one trade. And don't say you've never been warned on either of these two mistakes Cao made because any studying (not just my noobie post) will show you holding into ERs are just a terrible idea.