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

Trader8668 said:
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.
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If you were making money by diversifying, then why did you stop making money, for it does not make sense, as the reason you made the money in the first place was due to your diversification?

The markets will always go up and down, as sure as the sun rises and sets!

J_S
 
No matter how good you are, every strategy has a shelf-life - even though you're diversified I'm assuming that you still apply the same philosophy/strategy to these, and simply due to the constantly changing nature of markets, there will almost certainly come a time when when your strategies run out of steam and tank - only by having a sufficiently large portfolio of strategies, asset classes etc. you can become resilient enough to withstand the sands of time.

In your particular case it seems like it took you too long time to realize that your strategies were no longer effective, and that you erroneously believed that it was just a "notch in the curve" and that things would soon revert to normal, which does not have to be the case.

If you have the talent to achieve what you have achieved once, you can certainly do it again, but you probably have to go back to the drawing board. Alas, what you described above is not uncommon, and simply a fact of life for a trader...
 
You didn't really provide much information about your trading style and process. I assume you trade discretionary. However, successful discretionary traders have processes (rules), too. Do you follow the same process like you had during your winning times? Or did you have a process in the first place?

With or without process, I am surprised about the amount of drawdown, i.e. % amount of your capital lost, until you came close to throwing in the towel. I guess this amount is very different for different traders. I personally start to rethink my approach in relation to market conditions when I go beyond ca. -25 to -30% drawdown. When I reach those levels, I try to adjust to market conditions and not do the same thing over and over hoping that eventually things will turn around. Markets are changing constantly and no strategy will work in every environment (that's how laymen think).

I have the impression that you were lucky at the beginning and not yet complete as a trader. Take this as an important learning experience. See what you can improve in your trading and your reaction to market changes.

You were in a way "unlucky" that you started your career with a huge run-up. I started the other way round, since I had multiple blow-ups before getting better consistently. Always look for what you can improve in your trading.
 
AlphaMale said:
No matter how good you are, every strategy has a shelf-life - even though you're diversified I'm assuming that you still apply the same philosophy/strategy to these, and simply due to the constantly changing nature of markets, there will almost certainly come a time when when your strategies run out of steam and tank - only by having a sufficiently large portfolio of strategies, asset classes etc. you can become resilient enough to withstand the sands of time.

In your particular case it seems like it took you too long time to realize that your strategies were no longer effective, and that you erroneously believed that it was just a "notch in the curve" and that things would soon revert to normal, which does not have to be the case.
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Thats exactly right. I definitely expected it to be a notch in the curve and realized too late that I was overtrading and overstretched. My risk per trade did not come down anywhere near quick enough. Thanks for the feedback
 
"About a year ago I turned $150k into $1.3 million trading futures on a variety of markets over an 18 month period..."

Wouldn't 18 months forward from a year ago be like, November of this year?
 
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