When I first started trading, my #1 Rule was, “Don’t ever take a loss.” I carried this mantra with me as I pillaged trade binders and online trade lists. I was like a zombie—not the old-school zombies, who walked slowly and were easily knocked over—the newer zombies who run really fast and can destroy cars with their bare hands. But in the last couple of years, I have grownup — and with my new maturity, I have revised my rule to “Don’t ever take an unintentional loss.”
The phrase “unintentional loss” may stir a little confusion, because it suggests the possibility of taking an
intentional
loss. Why would anyone ever intentionally lose value on a trade? The obvious reason for losing on a trade is to help your fellow Magic player and to earn gold stars on the heavenly chalkboard. This is a good reason — but there are other reasons that are more relevant to the topic of this column. The key to understanding this technique is to destroy the way that you think about trading and rebuild it with this:
The secret to trading can be found in one word: Opportunity.
Value is not the focus of good trade habits; it’s only the by-product. The value will come, but opportunity is much harder to find. That’s why I conduct myself (and my trades) in a way that will cultivate future opportunities. You should understand that making severely lop-sided trades will burn bridges and destroy opportunities but taking a loss will build bridges to new opportunities. I experienced the power of this when I first moved out to Ohio.
I’d just finished playing EDH with the guys at the store. (They killed me for trying to Realm Razer their lands.) I shifted my seat over to some kids who were playing Standard. They were new to the store. One of them had an oversized printout of Elspeth, Knight-Errant as the front of his binder.
I pointed it out with a chuckle and said, “Nice, Elspeth.” He played an Honor of the Pure and then looked over, “Yeah, she’s my favorite card.” It looked like he was running a mono-white deck so I asked him, “How many Elspeths are you running in that deck?” He answered back, “I wish I had an Elspeth for this deck! I don’t have any.”
At the time, Elspeth was about $45. I told him that I had an Elspeth for trade if he was interested. He said, “I would really like to own an Elspeth, but I don’t have enough in my trade binder.” I love it when someone says this, because it puts me in the driver seat. It’s kinda like saying, “You can have anything in my binder.” He handed his binder over to me. I was pumped; opening a binder is always an adventure, you never know what you’re going to find. I picked up the binder and started flipping through it.
I immediately spotted a Noble Hierarch. “Things are looking good,” I thought to myself. I kept flipping — nothing, nothing, nothing, a foil Behemoth Sledge, nothing, nothing. You get the idea. I scrounged together $34 dollars worth of cards and still couldn’t make it to the Elspeth. He said, “See? I told you that I didn’t have enough.”
I didn’t want to clean him out of his bulk rares, because it looked like he’d just started playing.
I added another dollar card to the pile and said, “Would you do this for the Elspeth?”
He looked at the cards and said, “Are you sure? I’m fine with it but it looks like you’re losing on the trade.”
I answered back, “I’m good with it. I mean, how can I not trade my Elspeth to the guy with an Elspeth binder!?”
I didn’t know if I would ever see that kid again, but at the very least I knew that I’d made his day. When I take a loss like this, I never expect anything in return. By expecting something in return, I set myself up for disappointment when I don’t get anything. The idea is to take a loss for nothing more than the opportunity to build a better reputation, which will yield more opportunity for value. Since I’m a good trader, I’ll use these opportunities to maximize value.
Let’s fast forward a few months later. I was behind the counter at my local store stocking my case, when the same kid came in. He had become a savvy trader and eBay buyer since the last time I’d seen him. He still had the Elspeth printout on the front of his binder — but instead of crap inside the binder, he had a host of goodies, including a foil playset of Gideon Jura. He asked me, “Jon, do you want to trade?” I answered him, “I always do!”
We talked shop and started working on a trade. I was trying to even the trade out when he motioned for me to stop trying to find stuff to add; I asked if he was sure and he said, “Yeah, man, you hooked me up. I want to return the favor.” To this day, this guy gives me first dibs on the hottest cards that he gets.
It’s easy to see how taking a loss at your local game store can help you build a good reputation, but you might be surprised to learn that the same principles apply when you are trading at a big tournament away from home. Obviously the dynamics are different. In this setting it’s every man for himself at the trade tables, and everyone wants to gain value. You can take a loss in this setting to build what I call “proximity reputation.”
As you trade at bigger events, you’ll find that people will accumulate around your table as you trade. You need to be careful about how you conduct yourself in this setting. If you try to double up on a guy, then everyone who is watching will automatically label you as a shark, and then they’ll avoid trading with you. But if you do the opposite and trade in the person’s favor, then this will encourage the spectators to trade with you.
Sometimes, the trades with the spectators can lead to other trades or deals. At Grand Prix Columbus, I had a spectator trade lead to an opportunity to purchase a Near Mint English The Tabernacle at Pendrell Vale at 60% of the market value. This chain of trades—which started with me losing value—ended with me recouping the lost value and gaining value.
When you look at the value that I lost on the original trade, probably about $5, and you compare it to the value I gained on the Tabernacle, about $100, you can see that building a proximity reputation is better than trying to get value on everything. I won’t lie to you; there’s a lot of money to be made by taking advantage of people, but you have to ask yourself if that’s the way that you really want to make money. You also have to ask yourself: how long do you expect to be in this trading game? If you expect to do this for a while, then you’ll need to focus on building your local reputation and your proximity reputation. This reputation will eventually mature into network contacts and then outlets — more on this in the coming weeks.
The second situation where losing value in a big tournament setting can be a good thing is when you need to expedite a trade. You have to keep in mind that at a big tournament, there are a lot of people trading between rounds. If you don’t complete the trades before the round starts, you may never see that person again. That’s why arguing with your trade partner over a quarter is a bad idea. Using that time to gain a quarter instead of gaining the value from an entirely new trade is just not worth it.
I had a situation like this arise at GenCon. My trade partner was adamant about his pricing, and he wouldn’t budge. I was trying to get him to throw something in, and he just kept going back to reasons why his card was worth what he said it was. In the middle of the trade, a kid that I was trying to trade with earlier came up to me and asked, “Did you still want to trade?” I said, “Yeah, one second.” The kid had a foil Primeval Titan that I wanted to get from him. The best part was that he hated foils, and he wanted to get rid of it on the cheap. I went back to haggling with this other guy.
My ego kicked in, and I decided that I wasn’t going to concede the point. I said, “How about I add something from my side, and you add something from your side.” I use this technique when I am trying to even things out, by taking something that is valued higher than what they take. For example, in this trade, he added a Marsh Flats, and I added an Abyssal Persecutor. We went back and forth, and after I threw in a Kor Firewalker the trade was finally done.
I looked up to trade with the kid who had the foil Primeval Titan. He was gone.
Later that day, I ran into the kid who had the Titan. I said, “Hey, did you still want to trade that Titan away?” He smiled, “I already traded it. I got a Baneslayer Angel for it!” At GenCon, Primeval Titans were really hot, and I missed my opportunity to get one because I was determined to get that one dollar bill from the other guy.
Taking a loss should be part of your time management suite; it will help you process more trades in a set period of time.
Now obviously you don’t want to take a loss in every trade, but it’s important to know that it is okay to take a loss and when it’s okay not to. You also have to be able to take a loss without your stock being severely affected. This means that you have to work hard at building your trade binder so that you can take a hit every now and then. If you don’t have a large trade stock, then I recommend that you trade for some good uncommons, like Wall of Omens, Kitchen Finks, Crystal Shards, or Everflowing Chalice and stock your binder with them, so that you can take a loss by throwing these in on trades.
Instead of a stock tip today, I’m going to give you some homework.
Homework
Man, I know you feel ripped. I bet some of you don’t even read my articles and just scroll down to the stock tip part. Well, for some of you, today is a total blowout, but if you want to really learn how to trade, then sometimes you have to get homework instead of stock tips. Here’s what you have to do.
Take a loss on a trade, and then post it in the discussion section of this article. Post the trade details, why you took the loss, and what the result was, if there was an immediate result. If you have a past experience, feel free to post it in the forums.
Thanks for reading. See you next week.