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A Cautionary Tale: My 25-Year Struggle in Pursuit of Trading Success
Do you keep a trading journal? It would be useful to have a look at trades that make your equity curve dive. Is it a bad entry? The size too big? The stop too wide?
A long time ago I was using my trading account to pay my wife a salary. The account was 100k (South African Rand), and every month I withdrew 10k, never mind if I was up or down in a given month. The account fluctuated between 80 - 120, and in a tear I effectively made 120% profit without too much sweat, trading on the average 5 contracts (ALSI futures).
I think the biggest killer, at least it is for me, is the position sizing. By sticking to the same size my losses were automatically limited.
I think plenty of us who try trading for real, have had this same problem. Suddenly in an emotional state in a given trading day and not willing to take a loss, breaking our R:R rules already planned, then letting the loss build up to ruin the progress made in the prior two weeks or month or however, even holding over the night or sometimes getting margin called or liquidated. I finally got over the stupid problem I had of doubling down/martingale, in my early years of trading. So then I had my best year ever about five years back. But I still had the same problem of occasionally not willing to take a loss , "letting the monkey take over the wheel" as the trope mentioned here on futures.io
So I had given up the dream of ever trying to trade full time. And have always kept it part-time, for some quick "scalping" in the early morning hours. My trading journey has been about 14 years now. I've come to think it's very small for retail success in any given year, like lottery chances of anyone out of the tens of millions of retail traders in any given year, of anyone trying to trade for a living while not trying to be a vendor at the same time of that scam bullshi* because of actual failure, then pretending to trade and pretending to be profitable in their scam. Yes, those very few maybe 1 in 30,000 in any given year, have it made with their system and performance, even secret sauces they discovered (until their discovered edges are diluted at any time), but can't reveal or the HFT and banksters trading divisions will quickly recognize the retail volume and frontrun any new retail edges to uselessness if thousands of retailers pile up in volume the same entries trying to trade the same "holy grail" idea. The trading markets are always dynamic with price discovery by masses , looking to always smooth over the inefficiencies, with so many players and the institutional and banksters/hft/firm algos/market makers always have the edge. So I'd given up long ago trying to think it could be a full time prosperity trying to daytrade "for a living". Really a "twilight zone" fantasy dream, excacerbated by the myriad of snakeoil "guru" fakery and advertised of fake shilled trading education vending that never ends in all continuing eras of daytrading online from home.
I fully agree.
in my infinitely small point of view, I believe that the time horizon can, with due caution, make trading less instinctive and more reasoned. I mean weeks if not months to pick up signals and play the 2 cents
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
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It's been said here time and time again.
Nobody thinks they can watch a few youtube video's and then become a surgeon, so why do they believe they can become a trader? Being a successful trader is like being a successful athlete, movie star etc. The masses all want to do it, but only a select few are ever really successful. While commitment is important, commitment alone is not enough. Just like tiny differences in athletic ability could be the difference in being a star athlete, tiny differences in mentality or skill could be the difference in being a successful trader.
While I commend you @Trader146 on your persistence in your attempt and your openness in making this post, maybe it's time to move on. Being somebody who also has a passion for trading I understand that may be difficult do, but at times you just need to face reality.
1. Not having a teacher or mentor, thus trying to teach myself by trial and error.
2. Trading real money right away instead of paper trading or sim.
3. Not understanding how much emotions would affect my decision making. My result were literally worse than flipping a coin because I would always exit if the trade went against me, so even if it would have been a winner had I let it play out, in my case it was a loser.
Honestly, my best advice would be don't day trade. If you want to make money from the markets, invest instead. Buy and hold for the long term, on a regular basis, regardless of whether prices are up or down. It's called dollar cost averaging. Thanks to inflation, the market will always go higher...eventually. If you time horizon is long enough, you should come out ahead. This may not be the best advice, but it's better than day trading for 99% of us.
Most wealth for the middle class came from price appreciation of their home, so that should be your first investment. Daytrading is gambling and gambling is an addication that's hard to overcome. You are playing with fire when you dabble in addictive activities.
By the way, I'm still trading with APEX. I blew 8 of 10 or my evals and cancelled those I blew, but the other 2 reach the funding goal. I'm now working on 2 more evals. I've also started using indicators to help me make trading decisions and they are right more than I am without them. My results are improving.
I don't rely on trading as my only source of income. How could I? I've never ended a year profitable. It's more of a game now. Using APEX, it's cheap enough to not cause serious emotional reactions. An if I am ever able to make a withdrawal, that's a bonus. I'm a creator at heart which is how I earn a living, so I think I'll be alright in the long run. I don't have that much farther to go. I'll be fine.
It doesn't sound like trial and error was the route for you to take. It worked for me, I hated losing money so I found ways to keep losses to a minimum.
I found that trading real money was more realistic than trading demo accounts. I reccommend trading demo until you are profitable but to use the same capital as you would use when you fund an account. Much different emotions involved when your own money is on the line.
As far as taking you losses quickly, as far as I'm concerned that's a good thing. Every big loss starts out as a small loss. How about your profits? I'm guessing you took them off too soon also.
I agree with don't day trade. I swing trade stocks rather than buy and hold. I day traded for a while but found I make about the same swing trading without the time in front of a monitor or stress of making decisions on the fly.
I took the time to study why traders fail and then tried not to do any of that stuff. I made the time to actually write a trading plan. It's my operating manual for the type of trading I do. It attemps to answer the question "what do I do now?" An if/then scenario; if this happens then I will do this!
Do you have a written trading plan?
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
Thanks for the long post. You have actually told the story of many struggling retail traders. I haven't been trading for long, full time for about 4 years then went back to work. I have lost some $15K so far. From not knowing what to trade, what to look out for to now, I think I have progressed and that $15K is just parked there. I started playing the baccarat game in the casino in my early 20s and got quite good at it. I think I have made from the baccarat table to the tune of maybe $2500 (which is not a small amount then where I came from) and the last time was more than 20 years ago. I attributed my success at baccarat to my successful following of trend following plus a lot of discipline. I chose my time to go to the casino, only when I was energised and I exercised lots of patience. I thought of replicating that to trading but quickly realised we don't trade MES at a time when we most wanted to play. The really good time to trade the ES in a day are just that few hours and if you have missed it due to bad discipline then it's opportunities lost. I tried not to trade in the first 30 minutes and believe a less volatile trend emerges almost daily after 12pm NY time. My greatest challenge now is to find 10 trading opportunities where I can follow the trend and see if my strategy works. I used the 15m chart for trading decisions and the 5m or NQ 1m for the entry. Since I don't have a consistent strategy yet, what I do now is to minimise my losses. I never want to trade without a SL, never want to move my SL and never want to initiate a trade if I lost twice in a row. I never buy at the day's high, I am willing to forgo a higher high opportunity and I never want to short at the day's low. If I decide to go long, I want to get in at the next swing low. Here is wishing everyone success next week. I think ES is toppish but the bulls will make us feel that it's invincible scaring us not to short next week. I expect some long red candles.
I'm now half your age, and I actually think of quitting and jumping onto the "safe-career-train".
I can relate to a lot you are saying, especially that part with your family. It's really difficult to say who is the winner in life in the end if such a thing exists.
I know myself a person my age who has worked his way up in the company where he had his first job. He lives in a nice house and has an upper class car and on the outside he is a success. But if you look behind the facade he has a kid with a woman who uses it against him, drinks too much alcohol and piles up debt in the knowledge of being an only kid and inheriting a small fortune from his parents anyways.
Thanks for your post. Your story is an important perspective, which I can include into finding an answer on how I should go on.
"Thou hast been faithful over a few things, I will make thee ruler over many things"
