Made $1.15 million in 18 months, lost $1 million in 12 months, will I ever be good at trading?

[i am nobody]

First episode:

1. New poster from today
2. Made a killing for 18 months
3. Hundreds of trades
4. Losses cut quickly
5. Never had a losing account even since day one

Second episode:

1. 12 months
2. Hundreds of losing trades
3. Lost almost complete account
4. Struggling to make even $200
5. A 14 month drawdown (in 12 months?)

Am I the only one who has questions and is sceptical about this story?
Surf, is this you?

I see the last weeks a lot of new threads opened by new ET members. And many of these threads are about things that were already extensively discussed. It looks like a reanimation of ET.

 

[BONECRUSHER]

I find myself wondering why I have spent the past 5 years trading futures and stocks. There are a thousand other careers that are both more fulfilling and more of a steady return on time spent.

About a year ago I turned $150k into $1.3 million trading futures on a variety of markets over an 18 month period. This gain was based on hundreds of transactions with a holding period averaging days-weeks. I held usually 5-10 positions at a time so it wasn't based on any one market that took off and gave me a free windfall. I had lots of losing trades along the way but they were always cut quickly.

When my account size was over $1.3mm I figured that I would make $2-3mm the following year continuing my progress, buy a Porsche, and buy my girlfriend a diamond ring. WRONG. I increased my size at exactly the wrong time and then watched as I couldn't buy a winning trade and over the following 12 months my account hemorrhaged money. This was based on hundreds of losing trades.

Now I sit here with my dwindled account and I feel like I can't trade my way out of a paper bag. I'm struggling to make $200 trading stocks on a good day and continue to watch my account stagnate or slowly erode.

Why I may have skill: made $1mm, never had a losing account even since day one trading at multiple brokers, winners are always much larger than losers, low win rate and still profitable, 5 years experience, know all the old advice for trading about cutting losses etc., have survived multiple drawdowns in the last 5 years (none this severe)

Why I suck: lost $1mm, have been in a 14 month drawdown, bad mental state, low confidence, can't figure out what I'm doing wrong

I feel like throwing in the towel but unfortunately this is the career I've spent 5 years of my life on. I feel like Van Wilder, still in school after 5 years and no closer to graduating. On the one hand so close to finally being consistently profitable and making money, and on the other hand being a loser who can't even do the thing he's spent five years of his life focused on.

I wonder if anyone else has felt this way before and how they handled it and if they made it to the other side. Thanks for reading. Appreciate any feedback.

How did you lose that much coin in a short period of time while keeping "winners much larger than losers"? Either you broke that rule and let your losers get much larger than before or the widely known discipline of keeping losers smaller than winners (with low win rate) is a load of crap and doesn't always work! HERE THAT NEWBIES! TRADER8668...I think you had a really good run of being in some very STRONG and PERSISTENT TRENDS...now those trends have changed. I can sense that you were probably long stock indexes and momentum stocks...long the dollar...possibly short commodities or long treasuries...all of these asset classes have flat lined or reversed. Learn from this experience about market conditions and how they can persist far longer than anyone anticipated, and how they can fool a traders mindset. GOOD LUCK!!!!!!!!!!

 

[BONECRUSHER]

First episode:

1. New poster from today
2. Made a killing for 18 months
3. Hundreds of trades
4. Losses cut quickly
5. Never had a losing account even since day one

Second episode:

1. 12 months
2. Hundreds of losing trades
3. Lost almost complete account
4. Struggling to make even $200
5. A 14 month drawdown (in 12 months?)

Am I the only one who has questions and is sceptical about this story?
Surf, is this you?

I see the last weeks a lot of new threads opened by new ET members. And many of these threads are about things that were already extensively discussed. It looks like a reanimation of ET.

I wondered the same thing, but I try to give people the benefit of the doubt. If anything, I try to answer the post with the majority of readers in mind...so I'm not always speaking to the OP anyways. I like that your're skeptical!

 

[speedo]

I wondered the same thing, but I try to give people the benefit of the doubt. If anything, I try to answer the post with the majority of readers in mind...so I'm not always speaking to the OP anyways. I like that your're skeptical!

Ditto

 

[Trader8668]

First episode:

1. New poster from today
2. Made a killing for 18 months
3. Hundreds of trades
4. Losses cut quickly
5. Never had a losing account even since day one

Second episode:

1. 12 months
2. Hundreds of losing trades
3. Lost almost complete account
4. Struggling to make even $200
5. A 14 month drawdown (in 12 months?)

Am I the only one who has questions and is sceptical about this story?
Surf, is this you?

I see the last weeks a lot of new threads opened by new ET members. And many of these threads are about things that were already extensively discussed. It looks like a reanimation of ET.

I meant I've never had a losing account from what I deposited into the account. I've been trading for five years and have never net lost money from when I opened up an account to when I moved it to another broker etc. IE. never blew up an account from day one learning to trade.

Also 14 months is an exact figure of my drawdown, twelve months was just what it took for me to lose the million dollars. The last couple months I haven't really been losing money but I still haven't made new highs yet obviously so I'm still in a drawdown.

 

[Trader8668]

How did you lose that much coin in a short period of time while keeping "winners much larger than losers"? Either you broke that rule and let your losers get much larger than before or the widely known discipline of keeping losers smaller than winners (with low win rate) is a load of crap and doesn't always work! HERE THAT NEWBIES! TRADER8668...I think you had a really good run of being in some very STRONG and PERSISTENT TRENDS...now those trends have changed. I can sense that you were probably long stock indexes and momentum stocks...long the dollar...possibly short commodities or long treasuries...all of these asset classes have flat lined or reversed. Learn from this experience about market conditions and how they can persist far longer than anyone anticipated, and how they can fool a traders mindset. GOOD LUCK!!!!!!!!!!

Thanks yes I was in a lot of trends definitely and I agree that maybe the advice of having a low win percentage and hitting home runs is a bunch of bull. I was consistent in my losing the money as I was in making it. I never changed my strategy I was just too leveraged and I never had any homeruns to make up for the myriad small losses like I had on the way up.

 

[i am nobody]

I wondered the same thing, but I try to give people the benefit of the doubt. If anything, I try to answer the post with the majority of readers in mind...so I'm not always speaking to the OP anyways. I like that your're skeptical!

He should make 18 months in a row, every month, net 12.75% profit, after losing trades and commissions to make 1.3 mio. And reinvest his profits. If he does not reinvest his profits he can never make 1.3 mio. Without reinvesting he should make a return of 766% in 18 months. He is not daytrading, keeps positions day/weeks.

And then suddenly after hundreds of trades, which confirm statistically that his profits were not pure luck, he starts a 14 months drawdown? So continous losses?

He increased size in the second episode? He had to do that from start (first episode) to arrive at a profit of 1.15 mio.

 

[Trader8668]

He should make 18 months in a row, every month, net 12.75% profit, after losing trades and commissions to make 1.3 mio. And reinvest his profits. If he does not reinvest his profits he can never make 1.3 mio. Without reinvesting he should make a return of 766% in 18 months. He is not daytrading, keeps positions day/weeks.

And then suddenly after hundreds of trades, which confirm statistically that his profits were not pure luck, he starts a 14 months drawdown? So continous losses?

He increased size in the second episode? He had to do that from start (first episode) to arrive at a profit of 1.15 mio.

I don't get why this is so hard for you to understand. I increased my size as I went, the leverage inherent in futures is already substantial. I continuously reinvested my profits. I didn't obviously stay trading $1mm as if it were $100k. When I said I increased my size at just the wrong time it means that right before my drawdown I was trading the largest size I had been up to that point. Anytime before a drawdown is the wrong time to be trading large but obviously its impossible to know ahead of time.

Also it seems to me you're missing the point of this post. I'm not trying to get pats on the back or sympathy but asking if others have been through something similar and made it out the other side and learned from their failures.

 

[Stockmarketmap]

One doesn't need to "trade" in order to grow assets sufficiently as we can use "longer term" mindset and holding of equity classes to generate growth. ( fortunately / with some skill, I "held" onto my profit growth during my trading years in the 80's and 90's, "threw in the towel", and migrated to longer term holding methodologies and compounding ).

For example, risk mitigated alpha has been produced and has explained returns utilizing a conservative switching strategy using empirically derived "tactical factors" * and value universe ** / utilities sector / cash allocations.

CAGRs produced 1954 -2015:
- large value / utilities/ cash 16.4% vs. 12.7% B&H
- small value / utilities / cash 19.6% vs. 14.7% B&H

Rolling returns 1954 - 2015 using Small cap / utilities / cash strategy:
- 79% of rolling 5 year CAGR periods produced > 100% (median period CAGR = 158%)
- 12% of rolling 5 year CAGR periods produced 50 - 100% ( median 84% )
- 1 period produced negative returns ( -5.6%, 1970 - 1974 ).

* Sell in May anomaly "A Tale of Two Anomalies: Higher Returns of Low‐Risk Stocks and Return Seasonality" C. Fiore, A. Saha
Quantitative variable #2 https://docs.google.com/document/d/1u5PjMjpeLICy8fa-34c89oHqV6bghPTipGO_0IY3VRc/edit?usp=sharing
https://docs.google.com/document/d/17wSv7pobin6xgGXxe6MZSfZ6C-_ungJgMQBQd9O4CJY/edit?usp=sharing
heuristic = Buy Value universe Nov 1 - May 1, replace with / allocate to 1) utilities May 1 - Nov 1 or 2) cash when Q variable # 2 = high risk
** Source of data IFA.com returns calculator ( Large value, Small value), DFLVX, DFLSX, FSUTX, DJ Utilities Index ( adj.), cash period returns fixed at 1%

An example of an approach using individual comapnies involves the purchase of the top 10 performing Nasdaq100 stocks for the (a ) year ( at year end )
and holding them for 2 years. This produced decent alpha vs. the Nasdaq 100 / QQQ.
2003 - 2004 +122%
2005 - 2006 +97%
2007 - 2008 - 16% / +14.2% ***
2009 - 2010 + 104%
2011 - 2012 +15.8%
2013 - 2014 + 102%
2015 - 2016 (Apr ) -.1% / 2% ***

*** Using risk Q variable #2 improved 2007 - 2008 return; 2015 - 2016 yet to be determined
( 2008, 2015, 2016 high risk "cash" years )

Good luck !

- Don't quit your day job
- don't use leverage
- be patient / let "time compounding" do it's job
- many times, money is made by sitting on one's hands
- open a Roth IRA

James
Director of Quantitative Research
XOXO
Boulder, CO

 

[i am nobody]

Also it seems to me you're missing the point of this post. I'm not trying to get pats on the back or sympathy but asking if others have been through something similar and made it out the other side and learned from their failures.

I just wanted to say that the difference between episode 1 and 2 is much too big.
First episode was a complete success, and second episode was a complete disaster. From one extreme to the other, that's not logical. Especially because you speak about hundreds of trades and fairly long periods.
I could understand this difference if you would do a small amount of trades in a short period. Then it could be luck or bad luck. Statistical value of what you posted does not fit for me.