Hi, Steve,
If you managed to stay alive for seven years outside the work force and even have half your original stake left I'd say you've done way better than most. I'm sure finding a job or some other primary income will be great for you and possibly help you in trading if you decide to continue pursuing it. It will probably be a great relief for you and your personal life as well.
For most people I think swing trading on the side while having a day job or a business of sorts is the way to go. It's a path I wish I'd taken myself as well, but for some reason I got sucked into the world of day trading about ten years ago.
I know a guy who threw in the towel and he was actually way ahead when he quit as well. He told me he haven't missed it for a second. Particularly the stress of it all was weighing him down and he even had a day job for primary income.
I think it really takes a special type of personality to be a trader. It's not for everyone and I'm sure there are easier ways to make money.
I've been full time about three times, but in some ways gave up the dream a while back. I always
knew I would succeed as long as I put in the hours even if it took years, but only for these last two years have I considered that maybe there's a chance I actually won't.
Right now I have a day job which pays my bills and I keep plugging away on trading with virtually all my free hours. I feel I'm the best trader I've ever been and the winning streaks are longer with the losing streaks smaller, but I'm still not where I should be and definitely nowhere close to be a full time trader considering my capital base.
A: It’s hard to say…one problem was big losers. I would have two weeks where things were going fairly well, and then one bad day would wipe things out. The price action gurus would say that you can scale into losing positions and breakeven, but when I attempted to do this myself, I found that while it often worked and helped my performance, I would eventually get caught on the wrong side of a big trend day and get crushed, wiping out 2 weeks of profits.
That's mostly my experience as well. I'll rack up a 20 day winning streak, double or triple my account and start thinking I know something, but then I'll have a few losing days which throw me off balance and which can cascade into a losing streak wanting to make it back quickly to equity highs only compounding my mistakes.
For me, I think it's partially due to complacency. After winning for a while I start thinking it's easy and start to get sloppy on my analysis and using wider stops and/or more leverage. Not using the care and precision which actually produced those initial profits.
I think walking a tight rope is a very accurate parallell for day trading and maybe trading in general as well. There just ain't that much of a margin for error. If you lose your balance you're financially dead.
Q: "How has this experience over the last 7 years affected you?”
A: Pretty profoundly. I feel regret and shame. Along the way I have developed an anxiety disorder, become cynical, isolated and have a lot more gray hairs. The worst part for me is the realization that if I had bought a lawn mower and pickup truck 7 years ago and just started mowing lawns, there is a very likely chance that I would have made much more money doing that than I have in this trading endeavor. I have a huge hole in my resume, which I have no idea how I will explain my way out of for future employers.
Sorry to hear that, but I don't think think you should feel any shame. You took a chance and gave it your best. If anything, be proud of that. Make it a priority to get your health in order before you do anything more related to trading. If at all.
I can relate to your feelings of regret, though. It does indeed feel wasted when one sacrifices so much time, effort and money and don't have much to show for it beyond lost time and money. And you start thinking where you'd be in life if you poured all that effort into something else instead. I have friends who mindlessly got into the stock market post financial crisis and literally became rich doing nothing and think they're the next Warren Buffet not even knowing how lucky they got.
When your thoughts start drifting in those loops it can take you to dark places, but it's really no use as the only thing we can do is to take control of our life moving forward. The worst would be to keep repeating the same mistakes over and over again. What's done is done.
1. I do believe there are some retail traders who make lots of money trading their own personal accounts, but I believe that number of people is much smaller than one may imagine. I am not saying those people are not out there, just that I am not one of those people.
Not long ago I wrote that I'd pay $1000 if I could have some transparency about the details of trading operations (returns and account size) on traders in general and particularly on ET. I'm sure there would be many surprises. Some are transparent while others keep it vague and want to be the market wizard on ET. I suspect most belong in that latter category. One friend of a prior market wizard on this board recently said he don't think that guy ever made any actual money from trading.
I'm at a point myself where I don't really believe many at all are making much money or at least as much as they want you to believe, but I do still believe it's possible to be a successful trader. They're just very few. And often when I talk to a succesful trader I learn that they're so well capitalized that it's not even funny. I mean, if I had several $100K in my trading account I'm sure it would be a different outcome for me.
Anyway, good luck moving forward. I'm sure it'll turn out right for you. Give us an update about what happens further down the road.
All the best.
