What are the most valuable lessons you have learned?

[SimpleMeLike]

I haven’t been doing this long but with each trade I try to pick up knowledge along the way. If you-today could go back and tell you-that-just-started-trading something that you’ve learned along the way and would make your life way easier back when you started, what would it be? (Not talking about a stock that you now know took off…talking about skill-set)

Hello HuntingBenjamins,

You have asked a very a good question.

I would say for myself:

1. Do not let losses get too big in one day that I am unable to recover in the next X days. I use to let me losses get so big in one day, that it became unmotivating to recover it. But I did not realize that during the trade. I thought it would come back and atleast break even me.

2. Accepting drawdown and realizing I do not have to recover the entire drawdown on the next trade within the next X-XX minutes. It is ok to be in drawdown the next 1-X days until recover is made.

3. More time learning and Understanding position sizing methods.

4. Do not be stupid and know when to stop trading.

 

[p0box4]

Accepting drawdown and realizing I do not have to recover the entire drawdown on the next trade within the next X-XX minutes. It is ok to be in drawdown the next 1-X days until recover is made.

Huh? Just some post ago in another thread you posted this ...:

"Staying in drawdown for longer than 2 days is stupid."

I have seen a lot of funny posts and posters of this forum, people jumping from X to Y whenever it suited them, clearly having no clue what they are talking about, but rarely is it as clear as with you .

 

[SimpleMeLike]

Huh? Just some post ago in another thread you posted this ...:

"Staying in drawdown for longer than 2 days is stupid."

I have seen a lot of funny posts and posters of this forum, people jumping from X to Y whenever it suited them, clearly having no clue what they are talking about, but rarely is it as clear as with you .

Hello p0box4,

Thank you for showing me this. My fault on how I worded that.

I corrected my statement below.

Thank you,

https://www.elitetrader.com/et/threads/why-we-lose-money.375548/page-4#post-5843008

In addition, I ask to moderate to delete the post. It is causing far too much debate and talking.

 

[Laissez Faire]

Too late for me. I am already addicted.

But what would you recommend to do instead?

It's never too late to turn around. The time invested so far should be considered a sunk cost - especially if no progress have been made.

Learning to trade on your own comes at a huge cost both in time (your most valuable asset on earth) and money. @MrMuppet said 10 years and I think that would be accurate for most retail traders on their own. What he didn't say and where I think he'll agree is that there's no guarantee that you'll make it after 5 or 10 years.

So, worst case scenario you spend 10 years of your life and a considerable amount of money not really going anywhere. That's time and money you could have invested in something else.

If I were to start all over again I would have focused on strictly investing and low leverage swing trading while focusing on increasing my income through a job or some other business where I would fuel the excess into investments and swing trades managed part time. The returns may be less stellar than most starry eyed would-be-traders fantasize about, but they should be more consistent and more easily achievable.

 

[SimpleMeLike]

It's never too late to turn around. The time invested so far should be considered a sunk cost - especially if no progress have been made.

Learning to trade on your own comes at a huge cost both in time (your most valuable asset on earth) and money. @MrMuppet said 10 years and I think that would be accurate for most retail traders on their own. What he didn't say and where I think he'll agree is that there's no guarantee that you'll make it after 5 or 10 years.

So, worst case scenario you spend 10 years of your life and a considerable amount of money not really going anywhere. That's time and money you could have invested in something else.

If I were to start all over again I would have focused on strictly investing and low leverage swing trading while focusing on increasing my income through a job or some other business where I would fuel the excess into investments and swing trades managed part time. The returns may be less stellar than most starry eyed would-be-traders fantasize about, but they should be more consistent and more easily achievable.

Hello Laissez Faire,

This is another BEST post on ET Forum website of the year to me or in my opinion.

Really great post. Very good.

The cold hard facts is, a trader can work extremely hard and still not reach trading success or make any money worth while in the next X-XX years and have to be +60 years old living with the fact, they just ruined their life trying to be a successful trader. Not to mention all the money they lost.

I never seen a thread on ET forum about how much money traders have lost during their time of trading. I personally know someone who recently told me he lost -$650,000 of his family money trying to be a successful trader. It was painful even just typing that. This person has been trading for about 12 years he told me. 12 years of losing. He caution me well about the pitfalls of trading and how it can ruin a trader life.

We all talk about the trading theory and what it takes to win. We never talk about the losses of money and time spent losing the money.

These are the facts.

Thank you for stating them.

 

[Sergio123]

If I were to start all over again I would have focused on strictly investing and low leverage swing trading while focusing on increasing my income through a job or some other business where I would fuel the excess into investments and swing trades managed part time. The returns may be less stellar than most starry eyed would-be-traders fantasize about, but they should be more consistent and more easily achievable.

Ok. That's what I am basically doing anyways.

I am trading the Russell and NASDAQ ETFS and options.

My 401K is in the S&P for the most part.

Trust me when I say that the Corporate Clown world is no picnic, due in no small part from Black Rock and ESG that just fucked everything up.

 

[deaddog]

4. Do not be stupid and know when to stop trading.

Now that is hard to do and for the following reason:

When you die, you are dead, you don't know you are dead and don't feel any pain.

It's the people that care about you and the people that you know that feel the pain and suffer.

It's the same when your stupid!!!

 

[themickey]

Now that is hard to do and for the following reason:

When you die, you are dead, you don't know you are dead and don't feel any pain.

It's the people that care about you and the people that you know that feel the pain and suffer.

It's the same when your stupid!!!

Gottit, clever!
The stupid feel no pain, only those around him.

 

[HuntingBenjamins]

Too late for me. I am already addicted.

But what would you recommend to do instead?

Good point here. It is VERY addicting. I’ve got 3 trades going right now and once they are closed out I plan on taking a cool-down break.

So far I’ve got 33 wins and 4 losses. 2 of those losses I simply stayed in them too long. The other two were big time rookie mistakes. In fact one of the bigger losses was a lot of different mistakes rolled into one that I won’t be repeating. Both recovered fully after I got out of them. Knowing what I know now those losses wouldn’t have happened. I’ve got a better plan for dealing with those scenarios in the future.

 

[SunTrader]

Good point here. It is VERY addicting. I’ve got 3 trades going right now and once they are closed out I plan on taking a cool-down break.
...I’ve got a better plan for dealing with those scenarios in the future.

Famous last words.

If it sounds like I am dumping on you "been there, done that". Most have.

As for high win percentage. For the most part it is misleading at best and meaningless at worst. False sense of security that the ego eats up.

Return/risked percentage is what matters, over the long haul. What you keep.