(skip to the bold font if you don't want to read my history)
First, some background. I was introduced to the markets around August of 2013. A very close friend of mine said that he was going to buy shares in Kodak, about $3000 worth. He explained that if Kodak stock rose in price, he'd have tens of thousands in profit. Of course, being starstruck by the thought of making large sums of money, I found myself increasingly intrigued by stocks and how their properties could be exploited to return large amounts of money. It sounded easy to me, at the time, and so began my quest.
Every day that followed, I would check the Kodak chart and scour the internet for more knowledge about this new world. I'd see the "biggest gainers" list on Google Finance and daydream about how I could find myself on the winning side of those 10-20% gains. A few weeks later, Kodak filed for Chapter 11, and my buddy was out 3k. I wasn't fazed. The allure of vast amounts of wealth and freedom had gripped me.
I started my "education" with a book- High-Powered Investing for Dummies. I learned about all the financial instruments, their properties and how they could be used to generate income. I started perusing various finance-related forums on Reddit. I came across a Q&A by a professional options trader who would clear 7 figures per annum. Options would be my game, I decided. I bought Options Volatility and Pricing, the "bible" for options traders and diligently absorbed the contents.
October came around. My friend, seeing my interest in the markets and my apparent "calling" to pursue trading as a potential career, gifted me with a small amount of capital (1k) to trade. I opened an account with OptionsHouse and within a couple weeks, I was ready to trade. I started a written journal that was to be a carefully crafted record of my ascent to wealth.
I opened my first trade in TSLA, one put contract. It turned out to be a winner. I was elated. The next day I did the same. And the next day. I was over the moon! My account was up 50%, and it felt SO easy. But something was missing- I didn't have any meaningful method to speak of; I'd see that TSLA was kinda sorta going down, so I'd buy more puts. I vaguely knew of support and resistance, but had no context for using it properly. My solution was to make a "system" (which, in hindsight, was complete bullshit!) that basically operated on MA crossovers. I bought calls the next day, using this "system," and the trade went against me. "It'll come back," I said. And it went lower. And lower. And lower. The contract was nearing expiration and I closed, losing 95% of the account in one fell swoop. As most noobies do, I thought my problem was a lack of market knowledge. I set out to learn more. I didn't want to lose like that again.
I spent more time on Reddit, YouTube, and Google just reading. Through some fluke, I ended up in a chat room with a handful of self-made traders that could take money out of the markets day after day and support themselves. I asked one of these traders to be my mentor. For some odd reason, he accepted.
The next month or so I spent every day watching and learning how he would trade. Things started clicking. I felt like I was ready to try again. I threw down another 2k. It was go time.
In 2 weeks I was up 72%! It was easy! I was printing money! I even had a few rules written out like a ~real~ trader. Then, predictably, I found myself in a losing position. See, my mentor trades option expiration fridays, among other things. He had a trade setup that was going to good. I bought something like 150 calls in BBRY (12/12/13 on market open), betraying my mentor's advice to wait for confirmation. Price went against me, I was down 80% on paper. In ultimate frustration, I closed the trade; I was mad at myself for breaking rules, mad for not listening to my mentor, just MAD! An hour later, price soared. I later estimated that I would've been sitting on between $15k and $25k in profit. I was absolutely crushed. Blow up #2.
I'll spare you the details of blow up #3, but the reader's digest version is that I was trading scared and not following rules at all. I started off poorly, recovered, then blew it.
After that, I took a break for a few months- a real break. I didn't even read about the market, I didn't think about it. I didn't talk to my mentor much. I knew deep down that I wanted to make it at trading; it seemed to be the only thing in life that really pulled me in. I enjoy the challenge of it, the technique and logic required to master it. It "fits" me and how I operate.
-------------------------------
Flash forward to now. My re-entry into the trading mindset started when someone suggested that I look at getting a desk at a firm. I looked into prop shops around me, went through some introductory seminars and videos. Without going into too much detail, I decided that prop wasn't the route I wanted to go- but in the process of searching, I realized that REAL traders, professionals, treat trading like a business. They have plans, rules, goals and structure for what they do and how they do it.
Two months ago, I made a plan and gave myself a path to follow from Point A (here) to Point B (full-time profitable trader). I followed it to the letter. I went through the BabyPips curriculum. I reviewed the method that my mentor trades with in great detail. I made a plan- one that accounts for all my strengths and weaknesses and leaves no portion of my trading career to the imagination. I discovered why I was failing before and set out to make sure I accommodated for those failures. (Mark Douglas' book was particularly helpful here)
The next step in my plan is demo trade and build consistency. Follow my rules. Establish that crucial psychological foundation that a career trader needs to grind out profit every day and weather drawdown, year after year. It may take me a while, but it's worth it in my mind. This will be my public journal of my experiences. I share this so that 1) I can receive advice from traders who have experienced the errors I have/will make, 2) I have another layer of personal accountability and 3) I can serve as an example of what to do (if successful) or what not to do (if I fail). I'm not here to get a confidence boost or troll.
My trading plan can be found here. Keep in mind it's very much subject to change as I get in the swing of things; I don't have a firm handle on what works, what doesn't, etc. But for now, it'll serve to keep me consistent.
The system I'll be using is largely discretionary, based on reading price action and recognizing potential reversal signals. I've use a set of indicators to help make my method more mechanical and add confirmation to each trade to avoid poor decision making. More details about how I'll trade can be found in my trading plan.
I welcome your thoughts and comments. I'll post an update once I begin my demo trading routine.
-Poke
First, some background. I was introduced to the markets around August of 2013. A very close friend of mine said that he was going to buy shares in Kodak, about $3000 worth. He explained that if Kodak stock rose in price, he'd have tens of thousands in profit. Of course, being starstruck by the thought of making large sums of money, I found myself increasingly intrigued by stocks and how their properties could be exploited to return large amounts of money. It sounded easy to me, at the time, and so began my quest.
Every day that followed, I would check the Kodak chart and scour the internet for more knowledge about this new world. I'd see the "biggest gainers" list on Google Finance and daydream about how I could find myself on the winning side of those 10-20% gains. A few weeks later, Kodak filed for Chapter 11, and my buddy was out 3k. I wasn't fazed. The allure of vast amounts of wealth and freedom had gripped me.
I started my "education" with a book- High-Powered Investing for Dummies. I learned about all the financial instruments, their properties and how they could be used to generate income. I started perusing various finance-related forums on Reddit. I came across a Q&A by a professional options trader who would clear 7 figures per annum. Options would be my game, I decided. I bought Options Volatility and Pricing, the "bible" for options traders and diligently absorbed the contents.
October came around. My friend, seeing my interest in the markets and my apparent "calling" to pursue trading as a potential career, gifted me with a small amount of capital (1k) to trade. I opened an account with OptionsHouse and within a couple weeks, I was ready to trade. I started a written journal that was to be a carefully crafted record of my ascent to wealth.
I opened my first trade in TSLA, one put contract. It turned out to be a winner. I was elated. The next day I did the same. And the next day. I was over the moon! My account was up 50%, and it felt SO easy. But something was missing- I didn't have any meaningful method to speak of; I'd see that TSLA was kinda sorta going down, so I'd buy more puts. I vaguely knew of support and resistance, but had no context for using it properly. My solution was to make a "system" (which, in hindsight, was complete bullshit!) that basically operated on MA crossovers. I bought calls the next day, using this "system," and the trade went against me. "It'll come back," I said. And it went lower. And lower. And lower. The contract was nearing expiration and I closed, losing 95% of the account in one fell swoop. As most noobies do, I thought my problem was a lack of market knowledge. I set out to learn more. I didn't want to lose like that again.
I spent more time on Reddit, YouTube, and Google just reading. Through some fluke, I ended up in a chat room with a handful of self-made traders that could take money out of the markets day after day and support themselves. I asked one of these traders to be my mentor. For some odd reason, he accepted.
The next month or so I spent every day watching and learning how he would trade. Things started clicking. I felt like I was ready to try again. I threw down another 2k. It was go time.
In 2 weeks I was up 72%! It was easy! I was printing money! I even had a few rules written out like a ~real~ trader. Then, predictably, I found myself in a losing position. See, my mentor trades option expiration fridays, among other things. He had a trade setup that was going to good. I bought something like 150 calls in BBRY (12/12/13 on market open), betraying my mentor's advice to wait for confirmation. Price went against me, I was down 80% on paper. In ultimate frustration, I closed the trade; I was mad at myself for breaking rules, mad for not listening to my mentor, just MAD! An hour later, price soared. I later estimated that I would've been sitting on between $15k and $25k in profit. I was absolutely crushed. Blow up #2.
I'll spare you the details of blow up #3, but the reader's digest version is that I was trading scared and not following rules at all. I started off poorly, recovered, then blew it.
After that, I took a break for a few months- a real break. I didn't even read about the market, I didn't think about it. I didn't talk to my mentor much. I knew deep down that I wanted to make it at trading; it seemed to be the only thing in life that really pulled me in. I enjoy the challenge of it, the technique and logic required to master it. It "fits" me and how I operate.
-------------------------------
Flash forward to now. My re-entry into the trading mindset started when someone suggested that I look at getting a desk at a firm. I looked into prop shops around me, went through some introductory seminars and videos. Without going into too much detail, I decided that prop wasn't the route I wanted to go- but in the process of searching, I realized that REAL traders, professionals, treat trading like a business. They have plans, rules, goals and structure for what they do and how they do it.
Two months ago, I made a plan and gave myself a path to follow from Point A (here) to Point B (full-time profitable trader). I followed it to the letter. I went through the BabyPips curriculum. I reviewed the method that my mentor trades with in great detail. I made a plan- one that accounts for all my strengths and weaknesses and leaves no portion of my trading career to the imagination. I discovered why I was failing before and set out to make sure I accommodated for those failures. (Mark Douglas' book was particularly helpful here)
The next step in my plan is demo trade and build consistency. Follow my rules. Establish that crucial psychological foundation that a career trader needs to grind out profit every day and weather drawdown, year after year. It may take me a while, but it's worth it in my mind. This will be my public journal of my experiences. I share this so that 1) I can receive advice from traders who have experienced the errors I have/will make, 2) I have another layer of personal accountability and 3) I can serve as an example of what to do (if successful) or what not to do (if I fail). I'm not here to get a confidence boost or troll.
My trading plan can be found here. Keep in mind it's very much subject to change as I get in the swing of things; I don't have a firm handle on what works, what doesn't, etc. But for now, it'll serve to keep me consistent.
The system I'll be using is largely discretionary, based on reading price action and recognizing potential reversal signals. I've use a set of indicators to help make my method more mechanical and add confirmation to each trade to avoid poor decision making. More details about how I'll trade can be found in my trading plan.
I welcome your thoughts and comments. I'll post an update once I begin my demo trading routine.
-Poke
The "systemized, logical" bit is based purely on my perceived ability to follow a set of simple rules, which is yet to be demonstrated. In brief, my plan is the blueprint to the structure I aim to build through experience.
). The one "edge" I have in finding my edge (lol) is having a mentor who's done his work successfully for years now. I certainly won't be able to replicate his discretionary method trade-for-trade, but I have a leg up when it comes to finding out what works and what doesn't.