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Day trading - Considering throwing in the towel for good.
I think my plan has always been to grow my account to a more comfortable size where my % risk can be smaller and I can still continue growing my account. I hadn't imagined starting to take out money out of my account until it's substantially bigger. But maybe that's a mistake?
I think your comment about stopping trading after a certain amount of account drawdown is extremely valuable. That action alone could possibly make or break a trader.
Because, once I'm in drawdown (and this may be common with other traders, too), I'm only thinking about recovering the drawdown. As a result, often taking excessive risk and overtrading, etc. I think the only way to truly get the drawdown out of ones head is an extended break. Marty Schwartz have an essay in his book Pitbull about this very thing and he pretty much said the same thing. The only way to stop a losing streak is a complete break. And when you start trading again focus on simply making some smaller profits and re-building your confidence.
If I may be a little philosophical, what's interesting to me is that there might be some smaller adjustments that any given trader can make which could make or break one's career. Assuming a good enough system is in place.
I mentioned earlier how my performance improved greatly when I started running my winners and respecting my losses cutting them short. So, no changes in the actual system, but in the trade management part.
Another trader I've listened to would say stuff like, "I'm very picky about when I trade. Honestly, there are days where I don't want to trade and I will wait for the right opportunity."
Since I day trade, I often feel or want to engage with the market on a daily basis, but what if I simply stopped engaging with the market during less opportune times?
I know within my own trading system there are certain daily patterns I want to exploit and there have been days where I've successfully done so and turned off my computer because I know the market's more risky at that point.
If only I could implement this consistently and have the patience and discipline to stay out when conditions are not favorable.
It may be easier for a swing trader to sit on his hands since they by nature doesn't trade or initiate positions on a daily basis.
"Amen" .....
thats the only reasonable and considerable post any other discussion is finally waste of time.
ONLY YOU! .... and inside you, there are two "MONSTERS" ones name is GREED and the others name is FEAR
and the only thing is to master these monsters. Get to know yourself ...... try to see yourself from outside how you are acting.
You will have times, where everything is easy, you step in a trade and it turns immediately into a profit, nearly everything what you touch turns into gold.
then you will have times, where nothing works, you think theres is sitting somebody watching you, and once you buy, they sell take your stop and laugh on you.
then there will be times, where nothing happens, some ticks up, some down, you are watching the whole f.... day, but nothing happens, also funny especially after a loosing day.
take the times as they are, concentrate on the phases.....
FORGET ABOUT ALL THE FUNDING AND FOLLOW BULLSHIT. (....like somebody else mentioned before)
No money? no funding? ....be honest if you would have a bunch of money, would you give yourself money? .......exactly!
You don´t need OPM (other peoples money) there is such an enormous leverage out there available, that you can get it for yourself, with whatever small amount you are starting.
Start with just 1.000 to 10.000 possible? Yes it is, many did it before, start with 10.000 to 100.000, possible? yes it it, many did it before!
I watched a guy, around 20 years ago, he made it from 100.000 to 2 million, startet his own hedge fund and got from this 2m to 35m, lost 60% from this 35m. Restarted a new fund and made it to 350m, then he lost 80% within a corn deal, he has nearly brought the corn (as i remember) futures market to a hold, but was wiped out in a gigantic short squeeze. Thereafter i lost the trace. EVERYTHING is possible, as long as you can imagine, it is possible. But it is YOUR WAY! not from anybody else.
One hint for planning this!
STEP1 Try to seperate an amount you can afford to a bank account, name it "trading money", STEP2 Divide this amount in three parts, STEP3 Transfer the first part to your trading account......and GO FOR IT! Then you have in mind, that you have three chances, that makes you relaxing somewhat, that not everything is over, once your account is blown up. And you will blow up your account, may be many times. In the case, that you are successful declare an amount you will separate to the initial trading money account to fill it up. You will need it.
You must take a big risk to bring your account from "nothing" to a sum where your life begins to change. The challenge is, to detach the money from your trading account from the real lifes money......never ever think about what this money could have bought, or could buy. This are just numbers, once you get emotional, you will immediatley loose your spirit to make reasonable decisions. Be brave, be cool and "live the dance" of trading.
I blew out my account(over 100k) back in 2012. 100k may not seem like a lot to most, but to me it was devastating. I've been a truck driver since 1987, so the money I have continually put into the markets was hard earned overtime money. Only to see it disappear because of MY lack of vision and clarity. Notice I say ME, not others(or the markets). Even after being devastated mentally and being away from trading for a few years because now I had to work more overtime to try and build up another trading stake to start with, what do I do? I freakin do it again! YOU FREAKIN MORON!(I'm speaking of myself). I tell you this because my breakthrough moment has to do with this quote of yours below.
It seems your looking for trading profits to complete your life, which is exactly what I did. To provide you with what you need monetarily, which is exactly what I wanted. I struggled for many years with this. My breakthrough came after a pause from trading, a reevaluation of my trading strategy and timeline.
The conclusion for myself was this. I'm a truck driver, it's what I do. I'm a Teamster, so hopefully my pension will be waiting for me at retirement. The goal of my trading is to trade correctly according to my strategy. I don't worry about the profits because they do not define my financial success. For the first time since I began trading(early 2000's), I'm at complete peace. I've given up the dream of trading full time and my trading is better for it. Have I made 100s of thousands or millions of dollars? NO. That is not my goal. I make a good union wage driving a truck for a living, so if I can make an extra 10k, 20k or more per year until I retire, I will have been a success in MY OWN mind.
I'm only encouraging you to go ahead and take your break from trading and maybe reevaluate your trading goals. If you have a profession concentrate on excelling at that and making more money for yourself and readjust your trading timeline to a more longer horizon. Once you are at peace with the amount of money you would like to see out of your trading, your trading itself benefits, as mine has.
I wish you nothing but success and peace in your life. I've been where your at, and it does suck. Just dig down deep inside and find what you are truly looking for out of trading. Be honest with yourself because that's where the healing really begins.
Wow. Was that 100K blown out on both occasions? That's a huge loss. I feel your pain as well, brother.
I'm in Norway and being an egalitarian sociecty our wages are mostly fairly contained, so I would have great difficulties amassing 100K from savings alone. I often hear about guys in the US with accounts around 100-500K and I'm just baffled to hear it's even possible to have that much money to fund an account with.
Fortunately, for me, I've only funded rather small accounts over the years, but I'm quite sure I must have exceeded 50K of losses in total. Witht the amount of money I paid to develop my custom software I'm sure we're closing in on 100K in total.
The time I spent 'learning' trading and developing my system also have a cost as that's time I could have spent doing something else, i.e., working overtime or improving my curriculum otherwise.
Good comment. So, are you currently day trading or is it more like swing trading since you're currently still working?
In many ways, I also gave up on the dream of trading for a living (or riches) a few years ago, but I'm still attracted to the markets and I've kept plugging away part time (at a great cost with time, money and the opportunity cost of not pursuing other ventures).
As for what I want out of trading it's a good question. I've been at this for such a long time that I have at times thought to myself that I've even forgot why I started out doing it in the first place.
But my dream have always been the independence. Not even getting (filthy) rich. I just wanted to be my own man/boss and make my own way in the world instead of being employed by others.
So, I started out swing trading on the side when I was working as a carpenter and as luck would have it I actually made a small fortune at the time and really thought I was onto something. I didn't know much at the time so I made the decision to start educating myself on my own time and for some reason I got sucked into the world of day trading (potentially huge mistake there) and have been pursuing that ever since. Who knows. Maybe if I stuck with swing trading and would have participated in the great bull run over the last decade my results would have been significantly different.
Career wise, I'm now employed as an engineer as I took a new education along the way, but I really dislike it and it's just not for me, I think. It pays the bills, but it also sucks the life out of me (corporate life).
Maybe I should just focus my efforts currently on finding something else for a full time job and leave trading behind or stick with swing trading instead.
Oh my gosh no. My account finally grew to over 100k after starting with 10k, but that took several years to grow over 100k, while I was still depositing money every week($200). I lost the entire 100k in a period of 9 months(a lot of revenge trading). The next stake I lost was 36k that I built up from starting with 20k(took about 6 months). Please understand that the 20k I started with still took me took me a couple years just to save. At that time I dedicated $200 per week to go towards a trading account.
I have never day traded. In the past when I've blown my accounts up, the two I told you about and the few others in the early 2000's when I started trading. Mostly those were 5k accounts. I was only positional swing trading, maybe a couple trades that I might have been in and out of the same day.
It wasn't until I told you that I needed a reevaluation of my timeline and that's when I began to only exclusively trade futures spreads. The only outright positional swing trading I still do today is with the US 5yr treasury bond. Other than that I only trade spreads. Longer time horizon and lower risk, not to mention lower margin cost. I don't worry about double commission costs because in all honesty I'm only putting on maybe 100-200 or so round turn spreads on per year.
Boy oh boy, I know what you mean. I can't stand working for someone else. I absolutely despise the corporation that I work for, BUT!!!!!!!!!!!!!!! At the end of the day, " we gotta do what we gotta do!" That's just reality. What we would like to do just isn't in the cards sometimes, we have to deal with our own realities. I love baseball, I still play at my age(53), but I know I will never make the pro's! So you keep moving forward and do the best you can for your own life, but you still have to know WTF that is?
Bro, forget the past. Believe me when I tell you if anyone in this world has tons of regrets it's me. I can't undo all of my stupid mistakes both in trading and in life. I can only plug ahead at a pace that I can live with and accept.
I can only encourage you to find some sort of answer that you can live with yourself. Screw what other traders results are, or how they have made it ,or any other of the b.s. that our minds put us through. It will not help you. Only accepting certain realities will help. You need to define what your realities are and move forward!
I understand. Thanks for giving that detailed account of your story and what you currently do in trading. Seems like a very sensible approach.
Right.
I think the happiest I've been was when I was taking my degree in engineering and would take on carpentry projects on my own in the vacations to finance my studies. Maybe I should consider going back down that path.
100 % agree. What's done is done. We can't undo our past mistakes and we will never get back those years, so the only sensible thing is to move forward and cut our losses.
I spent my last 9 years professionally on engineering. That's 3 years of studies and 6 years of full time work - periodically with a lot of overtime.
I would have ZERO issues leaving that behind and writing it off as life experience. I do NOT feel like I have to work as an engineer for the rest of my life even though I started down that path and it may have been the wrong choice for me.
However, with trading, I find it much harder to leave it behind for good. Maybe because it's been such a big dream for me and I had such high hopes attached to it. Not to mention that I periodically have very good results and feel that I generally have a good grasp of the markets.
Another thing that's difficult with trading is that it's hard to judge where you're at. If you take a test at school or whatever you'll get the answer straight away and know 100 % in which areas you lack. Whereas in trading it's much harder.
What if by pushing on for another year or two I finally 'arrive'? I talked to another trader elsewhere who told me that it was around the 10 year mark things finally clicked for him.
Anyway, I really thank you for the good words and kind wishes. You're a good man.
If I quit day trading, I suppose I will still be participating in the markets in some way. Most likely swing trading.
I probably won't get rich quick, but maybe I'll get rich slowly. Maybe I'll also find some other vocation or career path that will be better for me.
It's possible that trying to get rich quick is what have prevented my success so far. Just think about where I'd be today if I started trading far more conservatively 10 years ago.
.......exactly!