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Catching Big Waves - a trader's journal of surfing the the markets
I wanted to become a trader, because I had lost a lot of money. It is not a career path I chose until that event. I had never even invested in stocks. My reason back at that time was, I would rather invest in something where my actions determine the success or failure. Who knows what any CEO (my thought of why stocks went up or down at that time) might be doing that would cause the company to succeed or fail. I preferred my chances with myself, my tenacity, and my hard work. And it paid off very well. Until one day it seemed like everything changed.
A friend who was in real estate commented at the time, “Where are the buyers, it is like someone flushed the bowl and they are just gone?” They'd come back. At first, we all rationalized it was just a seasonal thing. Florida is like that. We'll see the rush again when the “snowbirds” come down. Then for several years, many realtors I knew would comment how things were picking up. We all see now... it was all pure optimism. Our own dose of hopium.
So, from high point to low point, I had lost everything. A net worth of over $4M. In the process, I had opened a brokerage account at Scottrade, thinking I needed a “hedge” to my other investments, and stocks had just gone on a ridiculous sale compared to before. Of course, I went in around 2.5x leverage (my mind was based in real estate, where 4x leverage was conservative), and when the market really collapsed I had multiple margin calls, to the point where my original $400k was down to about $100k. It was so fast, in comparison to the years of waiting for real estate values to come back. And so, having seen the most powerful financial force I had ever witnessed, yes it took my money, but the majesty of the whole thing was mesmerizing. I soon discovered 3x ETFs, bought some books on daytrading, and off I went until I had gone through what was left.
It was in that place where something was born inside me. I had started to read books about traders who had lost everything, and then been determined to get it back. And I decided I was going to be one of them. It may take years, but I was going to do it. The problem with that motivation, I see now, is it does not come from the right place.
What was lost trading was barely 10% of my total loss. I turned my back on the greater pain, the world of construction and real estate, and embraced the possibilities of my new path to become a trader. I would read or study charts or backtest 7 days a week. I had no work at the time, nothing was happening in my industry, and my depression, that came from the whole experience, caused me to almost hole up in a cave that I created, called “becoming a trader.”
One day I got a call, a group wanted me to manage the opening of franchises in Florida. I asked if I could do it other places too, and the answer was “let's start with Florida and see what happens”. Hard work, tenacity, me at the helm, and now several years later I am licensed to work in about 20 states and running a new successful company. I titled myself “Project Manager” on my business cards, instead of “President”, feeling so low in my self esteem that I felt I needed to work my way up, in my company of one. Strange maybe, but so much psychological damage occurred inside me over the years where my world just collapsed.
I started into business by chance. I never wanted money, or things, just enjoyed being a musician, enjoying life. For some reason felt like it was time to move on and be “responsible”, but did not like the idea of working for someone my entire life. Independent. Free-spirit. I set a goal to work for 10 years then retire, and I made it. But by then, something had changed. I tried going back to my slow lifestyle, but there was this energy to being so busy, to earning so much. And when I came back for round two of making money is where I lost everything I had as my life's goal.
I just wanted an easy-paced life, to have fun, be happy. And then I discovered money.
So, back to the call. I started a new business, but had developed this need to pursue trading and so I continued to keep up my shcedule of relentless study, wherever I went. I was now working 50-60 hours, and studying/trading every other waking hour. Many times sleeping with my laptop, maybe getting 2-3 hours sleep. Along the way I went through a few $5k, $10k futures accounts. (Futures = max leverage = “the best”). Strange logic. But I was starting to make money and could support my trading “habit”, and rationalized that some day, it would all be worth the effort.
Today, I guess I can “trade”. From where I sit, it is nothing like what I thought it would be. For some reason I had the image of this powerful financial machine that once mastered would provide riches beyond belief. That is far from the truth. My experience is, I work my ass off, to pursue something that has no guaranteed outcome, which causes a lack of faith in risking anything sizeable.
Meanwhile, my personal schedule outside of work is non-existent. I continue to keep up this regimen of work, study or trade, or exercise, 24/7. And my recent push to go to trading full time is just to stop the punishment. I am exhausted. I am angry. And the “life” that I had entered the world of making money for... seems to have left.
In my mind, if I went to trading full time, I would have all this time again. Be free to become a free-spirit again. Be happy. But I see the comparison between two sources of income as night and day. In business, I know how much I will make the day I start the job. I receive a lump sum, and already have my expenses contracted out the day I start. In trading, I am not comfortable enough in the outcome of any trade to stop scalping.
And just as I thought I would get my chance, to see if when the business world slowed down if I could get my head in better alignment with uncertainty, it was almost a “sign” that I had lost my main account... in the past couple weeks my client got their account back, and called me saying we were ready to go again. It was one thing to have work fall off and slowly slip away, it is something completely different for me to burn that bridge. If I choose to not deliver what they are looking for, they will move on without me.
So I have become an indentured servant to promises I have made in my past. Letting go of either side is tough. Not letting go, at least to some degree, is killing me. I do not enjoy keeping up the pace that I have for the past 5 years.
Others are listening and thank you for posting a critical self-assessment. Your reflection has afforded you to see what most of us do not want to admit about ourselves. Thank you for your honesty.
I hear ya when you said, "(trading) causes a lack of faith in risking anything sizeable." It is true, higher-reward calls for higher risk. I, too, am unwilling to take those risks and rather scalp my way to profitability and therefore never earn quite enough to make trading my livelyhood because I continue to "hedge" my bets. Beginning this month I am in the "envious" place of trading full time. Having earned enough income in a new business that operates only in summer, I have fall, winter and spring to focus on trading.
Gary, do you only trade oil? You need a trading partner(s) should you decide to go full time. Don't go it alone. PM me if you have other concerns you need to talk about. I am a good listener.
Thanks Ken. Sometimes I wonder if this is even the place for this. But, I started it, Mike has not cut me off yet, and it has become a place for me to take time and focus on what is really happening inside. I thought that was part of what trading journal was, to understand myself.
I mostly only trade oil. Here and there I will play with a trade in ES, TF or 6E. But 99.9% CL. It isn't that I feel the analysis is that much different, but they all move diffrently. Something hard to know by watching the left side of the chart, but on the right side each has it's own unique motions. Swing trading may not be that different, but scalping definately is. And since that is where I am stuck for some reason, I go with what I have seen the most.
I do not understand how a trading partner would work, but am open to it.
