Lessons from a failed trader

Laissez Faire said:
I was up 36.2 % net last week day trading only the RTH Open on most days, i.e., 90-120 minutes and I'm a mediocre day trader.
Am I able to do that consistently? Not yet. Maybe never. We'll see.).
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LF mentions it was not consistent
 
themickey said:
Impressive, congrats! :) Nice work.
Scaling up & compounding is do-able when you have confidence.
That's when it really starts working in your favor. :)
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Thanks! :)

Currently, I'm profitable about 80 % of all trading days, but I still make mistakes and have sticking points to address. I had one trading day a few weeks back where I gave back a lot of my profits so far this year. Last fall, I had over 15 winning days in a row, scaled up, lost all my profits. In points per contract it was just a normal two losing days, but since I had scaled up, it ate away all my profits on smaller size.

Bottom line: I'm still not as consistent as I need to be and because of this I'm trading small size for now (1 contract mostly). But I know what the market offers, what's possible and the potential of my method. If I can address my sticking points and slowly increase size I'm hopeful that I can eventually get a good return on both my capital and time (invested).

But knowing how much time/effort/$$$ I spent to get to this stage, how much time I still need to invest on a daily basis, and still not what I'd call a successful trader I would completely agree with the OPs suggestion and would never recommend anyone to pursue day trading. The sky's the limit, but most people don't get there.
 
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Yup - mistakes!!!
That's the killer!
A while back I realized that my trading mistakes were hugely expensive, so I worked on that.
Like they say, don't trade looking at money, look at trading as following your methods and the logic you created.
So it follows, look at eliminating mistakes and profits will follow.
 
themickey said:
So it follows, look at eliminating mistakes and profits will follow.
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Yes. A classic for me is being right, but too early. In day trading you need excellent timing/patience. Almost good enough won't cut it. Last week I had a few textbook trades where I waited until things lined up perfectly and then entered without any prior mistakes to pay for (and end up breakeven or breakeven ++) on the day).

Investment/swing trading have a lower margin of error and you have the time to think through your decisions. Day trading is very fast in comparison. Easier to make mistakes. Easier to lose your head and 'revenge trade'.

But we may be getting off-topic...
 
tsznecki said:
I thought you said you made 1000000000% on some Indian bank. Why do you need lunch money? Unless of course, you didn't make 100000000%.
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He achieved his return in Venezuelan Pesos.:) Anytime you see claims of outlandish returns assume it is not in $US but in argentine peso or Zimbabwe dollar.
 
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zghorner said:
value investing is boring and day trading is literally just too fucking hard...somewhere in the middle is juuuuuust right.
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You can be 100% long value or growth and then do the wheel, triple income strategy, on margin, reinvesting the profits and dividends into more value or growth.
 
YoungOne said:
Hello All,

I am writing this post because even if it helps one person it was worth it.

I purchased my first share of stock in 2005. I then became a daytrader for many years (until about 2014). I kept thinking that one day it will all click. I figured if I never quit, I would one day be successful. I tried price action, indicators, combinations of both, time and sales, etc. ad nauseam. However, eventually I quit, I had lost tens of thousands of dollars and had no backup plan or skills to build a new career upon. Unfortunately for me, I had no finance professionals around me to guide me. I wasted years of my life chasing short-term trading in hopes of one day finding a profitable system. I blamed my discipline. I blamed my trading system. I fooled myself into thinking that I was getting closer, that I all I had to do was work harder, and the profits would pile up soon enough.

Now here is where the story gets interesting. In 2015 I discovered value investing. I spent some time learning about fundamental analysis, something I spent no time learning back in my trading days. It all started to click. If a share of stock is just a partial ownership in a business, why would some squiggly lines on a chart tell me if the business would be more valuable in the future. If you were to buy a local coffee shop, would you somehow try to use TA to buy it? Heck no, you would research competition, talk to customers, talk to the employees, etc.. You would see how much the business earned over the last five or ten years, and try to pay a fair price to earn a satisfactory return on investment.

Once this light bulb went off, I then spent a lot of time reading everything Warren Buffett wrote and the writings of other successful value investors. I started to learn how to actually value a business using a discounted cash flow approach. Since then, I have yet to have a single losing year. It doesn't mean they can't happen, they will, I will possibly have many over my career, but the long-term scorecard will be satisfactory. I am now managing money professionally for friends and family. I just wish I could have seen the light earlier, instead of wasting so much time, energy, and money chasing short-term speculation.

Anyways, I figured I would write this post and share my story. If it helps even one person become more successful and happy, it was well worth it.
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I only use technical analysis and I have an Accounting Degree mind you. Every hear of the accounting scandals? Forgot the year where it came out, but, it showed me that figures cannot be trusted when the accountants tasked to audit the books of the company purposely, do not audit their books and certifies their financial statements as reflecting accurately, their financial position? Utter garbage. Technical analysis, you do not know how to use it, which is your problem. You got into trading half assed and did not have a means to measure your progress? What could go wrong? Everything? At a minimum, you needed proper risk management, risking no more than 2% per trade and taking no more than 5 positions to limit your risk. Add to that a trading journal. I guess you never had one or were too lazy to record your trades so that, you can review them? So, how can you correct your mistakes if you do not know your mistakes? Now, CNBC, Bloomberg, news stories, trolls in social media are not there to give you accurate information but, to mislead you. Ask yourself what are the financial relationships of those companies to hedge funds, big investors, etc.? Conflict of interest ring a bell? Stockcharts are the purest form of reliable information out there. Why? Think about what those candlesticks represent on a daily chart? That is all the trading and positions taken by traders in that stock. There is no hocus pocus to mislead, lies and disinformation from media and trolls. Which would you rather use knowing all these?
 
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