I used to love reading Neke's journal because it was raw, honest, and lacked a lot of the BS that so many journals have on ET. Neke reminded me of myself early in my trading career...self-financed, working stiff with a very good life and career compared to more than 95% of the world's population yet still missing that one thing that would complete you. Seeking to get out of the rat race, ditch the cubicle, shed the suit and tie, and provide for your family in the comfort and freedom of your tee shirt and boxers. Then you wake up and realize that it is all bullshit really. This is a business...serious business and you better treat it like that, and you better make sure that everyone else that is around you treats it like it is serious business.
Neke's meteoric success is the exact cause of his current malaise. He has been conditioned to treat trading as a game and the account balance has merely been a tally of the high score. Too many cliche's and trading adages have been at work in Neke's trading to allow him to adapt and overcome the changing tides of the market.
1. Plan the trade and trade the plan. But what if the plan is no damn good?
2. Stick with the plan even when suffering a serious drawdown. But what if the plan is no damn good?
3. Focus on the plan...not the money. But what if the plan is no damn good? The money is the only thing that keeps you in the trading game. It is your life blood. When the trading capital is gone...your trading life ends.
Neke has failed to properly discern luck from skill. Neke still hasn't realized that he is a reversion to the mean trader. Neke has failed to realize that trading with 500k is a lot different than trading with 50k and thus the strategies and risk should also be different. With 500k he should have graduated to writing credit spreads, doing straddles, condors, etc. I have a saying "Small accounts seek volatility; large accounts seek predictability".
I told Neke over a year ago that he was playing a very serious game. Neke is an engineer and I know how much or shall we say how little most engineers make per year even those from top schools only make around 100k/yr. Now he has been making monthly withdrawals to help maintain his current standard of living all while suffering a hellacious multi-year drawdown. This is the type of thing that destroys marriages, families, and causes guys to take a swan dive off of the highest building in their city. This is real life Neke not a computer game. Take time and seek advice and let a trader you trust review your trades. Many of the trades you used to post had absolutely no apparent rhyme or reason to them other than they had gone too far in their current direction so you were going to go short or long and wait on the "inevitable" correction/reversion. If they kept running then you'd add to the loser and keep adding until the pain got too great to bear. Oh and then you'd lament how the market eventually turned and you would have made tons of cash if you had just held on a little longer. It's not all doom and gloom though Neke. You still have a sizable account balance for someone with a viable trading plan and proper risk management skills. Stop trading, withdraw all but about 50k, learn a few viable strategies, develop solid risk management, and share your trades with someone(your wife is a good start). I wish you much success Neke but you have developed too many enablers and cheerleaders here on ET.
P.S. automation is overrated. Automation isn't made to replace discretionary trading only enhance it. Computers can only trade the plan that it is programmed to trade. But what if the plan is no good?
