Stock market - How lucky I was the day before a major crash

Back in 2001, besides being much younger I had my whole savings invested in the stock market, and I figure it will give you an idea of panic selling in the stock markets and stock market crash.

I was an amateur at stock markets, started dealing back in 1996-7 with some luck and no knowledge and made some easy cash. I didn't even know back then what profit loss was. Well I learned a lesson, one that I'll cherish forever and surely will save you a lot of money. When investing in stock, is you use stop loss techniques you may limit your downside, What do I mean specifically? Well if you buy a stock for $10, and you figure it may have a potential to go up to $11 based on fundamentals, technical analysis etc.etc. you should stick to this plan, looks very clear buy at around $10 sell at $11 ... but if you buy at $10 and it falls below $10, so lets say in stead of going up, it just takes the route down. What do you do? Well you settle you stop loss right at the beginning of your trading idea, suppose you establish 5% stop loss, that means if the stock passes $9,50 you'll sell automatically ... I know it's easier said than done, and nobody likes losing, but consider it a mistake, people do mistakes and normally learn from them. Next time you'll have a better chance.

So back to my story, I had all my saving invested in stock 20.000 Euros, that by September was only 15.ooo Euros I was down pretty bad. And every time a stock went down I'd buy more to reduce the average buying price. Everything I was making from my day job I was putting it into stock trying to reduce my average price looking for a smooth way out of some bad stock picks. I soon learned that if a stock was going down, that didn't mean that it was getting cheaper, it meant it would keep going...

So on the week of September 11, I was getting whipped, and on the 10th I sold everything I had invested .... and said to myself the market is going down and I have to get off this boat ... it was a painful decision, basically I admitted that my whole investment strategy was wrong. Back then I was into fundamentals, but I learned that the market rules, and fundamentals are secondary. So I got rid of all my stock and promised myself, that I'd try to learn where my whole trading strategy went wrong.

September 11, what a disaster the stock went down for 2-3 days ... I was out of the market in reflection about the whole thing, and how lucky I was, and how stupid I've been for ignoring the sell signals the market was giving me.

Anyway, I actually recovered part of my loss during October 2001, then put the money into a down payment to buy a home, so I spent most of the bullish season after 2001, out of the market without a dime to invest in stocks.