A year in. Lessons Learnt, Fingers Burnt

[medic]

I've been live trading a year now and though it worth sharing some of the highs and lows of my journey.

I got into trading after my daughter was born. I'd taken 3 months off work and decided I could solely focus on day/swing trading with the 100K I had in savings.
Being in a technical profession (also have a PhD in math) my style was indicator/rule based and to that end I watched every trading seminar, read every blog and learned about all the technical tools I could over the first month.
I went live placing 10K-50K trades on stocks I'd researched and charts I or others had liked. Sometimes I'd stay in the trade a long time (I still hold my first stock bought), but mostly I'd be out before the close not wanted to suffer opening bell shock.

I entered stops until i got level 2 access when on too many occasions saw the action move right in to take my stop before rebounding away. After that paranoia had me write my stops down and then manually exit trades that reached them.

I kept a trading journal and kept account of my P/L, plus did a nightly debrief on how (and why) the day had gone.

On a good day I'd make 500 bucks, on a bad day I'd lose 1000. The nightly tally showed I was slowly getting poorer and over time was not getting better.

It got to a point where I'd spend couple hours researching my picks then enter trades in the opposite direction as I came to understand the market was not behaving to any of the indicators or patterns I'd learned from any of the hundreds of Guru trainings I'd been through.

About 6 months in I came to realize that even with my account size intra-day was too hard to play, so my time frames move to weeks then months. I finally entered a trade that I was convinced about which went against me for 5 months. I'd decided to stay long in the stock regardless as I was that sure. The stock blew through any rational limit I would have set and I decided to wait for it to recover. I eventually sold for a 40% loss through fear that the company would go bankrupt.

At one point in the year I was 15% up. I'm out now (apart from my first stock) for a total loss of 15%.

I've never really failed at anything and have been very humbled by the experience. Learning so much in a short time about trading and then failing to make it work has left me with the feeling that knowledge, a strict trading plan, and the willingness to put in full time hours really offer no guarantee of preserving capital let alone make a healthy living.

Respect to those that make it work. For a time I was one of you but for now I'm poorer and out.

 

[PATrader]

Respect to those that make it work. For a time I was one of you but for now I'm poorer and out.

Don't lose heart its only a year. While you are out, take the time to learn more, practice more. then come back with a bang if you want

 

[PATrader]

actually better to lose heart than hard earned money....resist the temptation to get back

in anything we do, we need passion. If he has the passion, nothing can stop him coming back. he just needs to fine tune on how he trade etc.

 

[counter_violent]

I've been live trading a year now and though it worth sharing some of the highs and lows of my journey.

I got into trading after my daughter was born. I'd taken 3 months off work and decided I could solely focus on day/swing trading with the 100K I had in savings.
Being in a technical profession (also have a PhD in math) my style was indicator/rule based and to that end I watched every trading seminar, read every blog and learned about all the technical tools I could over the first month.
I went live placing 10K-50K trades on stocks I'd researched and charts I or others had liked. Sometimes I'd stay in the trade a long time (I still hold my first stock bought), but mostly I'd be out before the close not wanted to suffer opening bell shock.

I entered stops until i got level 2 access when on too many occasions saw the action move right in to take my stop before rebounding away. After that paranoia had me write my stops down and then manually exit trades that reached them.

I kept a trading journal and kept account of my P/L, plus did a nightly debrief on how (and why) the day had gone.

On a good day I'd make 500 bucks, on a bad day I'd lose 1000. The nightly tally showed I was slowly getting poorer and over time was not getting better.

It got to a point where I'd spend couple hours researching my picks then enter trades in the opposite direction as I came to understand the market was not behaving to any of the indicators or patterns I'd learned from any of the hundreds of Guru trainings I'd been through.

About 6 months in I came to realize that even with my account size intra-day was too hard to play, so my time frames move to weeks then months. I finally entered a trade that I was convinced about which went against me for 5 months. I'd decided to stay long in the stock regardless as I was that sure. The stock blew through any rational limit I would have set and I decided to wait for it to recover. I eventually sold for a 40% loss through fear that the company would go bankrupt.

At one point in the year I was 15% up. I'm out now (apart from my first stock) for a total loss of 15%.

I've never really failed at anything and have been very humbled by the experience. Learning so much in a short time about trading and then failing to make it work has left me with the feeling that knowledge, a strict trading plan, and the willingness to put in full time hours really offer no guarantee of preserving capital let alone make a healthy living.

Respect to those that make it work. For a time I was one of you but for now I'm poorer and out.

A 15% overall loss in year 1 is a pretty remarkable result actually.
You might well be made of the right stuff.

 

[PATrader]

passion is fine but here we are talking real money, real lives...in most cases better to stop when the individual initial limit is reached just like a stop loss

else you are left wondering at each additional loss if only I had stopped then

I agree. Its better to stop, take a breather, learn what mistakes one makes, fine tune it if needed, accumulate capital, and then make a come back. All done when you don't give up on what you are happy doing.

 

[PATrader]

well happiness in business comes only from net positive expectancy

a lot of business ventures are started on passion but doom to failure since they cant weather the harsh realities of business environment....

surprisingly high number of businesses underestimate working capital requirement and are dangerously under capitalised....so passion or what you like is not enough....better like what you do than do what you like

Trading is also a business....that too with high risk so need to be treated as such

that's why i said he needs to re-evaluate his methods right? I agree, passion is not the only thing.

 

[InvestYourWay]

About 6 months in I came to realize that even with my account size intra-day was too hard to play, so my time frames move to weeks then months. I finally entered a trade that I was convinced about which went against me for 5 months. I'd decided to stay long in the stock regardless as I was that sure. The stock blew through any rational limit I would have set and I decided to wait for it to recover. I eventually sold for a 40% loss through fear that the company would go bankrupt.

I have to concur with PATrader, a 15% loss in your first year can almost be classed as a success by many newbie traders!

You certainly seem to have the correct mindset of planning trades, doing a post mortem and, having not completely busted your account, at least some sense of decent money management. You already mentioned you had expanded your timeframe for trades which is a good move and one which hopefully will allow you to trade on the side whilst you continue with other endeavours. Fewer trades also amounts to less in commissions, something many new traders fail to factor in.

The piece I have quoted above though is a classic error and it is amazing how much one move like this, where emotion takes over, can wipe out weeks, if not months, of hard work and good trades. A good way to combat this mindset is to look at the stock afresh and ask yourself would you open a new long/short at this point. If the answer is no then you are simply running the existing trade hoping for a recovery, which is no way to trade as it sounds like you've realised.

My advice is not to lose heart and to continue trading, even if it is not full time as you have been doing. Failure and making mistakes is a part of life. The problem with trading is it magnifies these failures/mistakes to astronomical proportions. Making a small error at work is something which happens and you learn from, doing it trading could cost you 5% of your account which just made your job that much harder.

Best of luck and keep on trying, it is the only way to learn.

 

[pboyles]

I've been live trading a year now and though it worth sharing some of the highs and lows of my journey.

I got into trading after my daughter was born. I'd taken 3 months off work and decided I could solely focus on day/swing trading with the 100K I had in savings.
Being in a technical profession (also have a PhD in math) my style was indicator/rule based and to that end I watched every trading seminar, read every blog and learned about all the technical tools I could over the first month.
I went live placing 10K-50K trades on stocks I'd researched and charts I or others had liked. Sometimes I'd stay in the trade a long time (I still hold my first stock bought), but mostly I'd be out before the close not wanted to suffer opening bell shock.

I entered stops until i got level 2 access when on too many occasions saw the action move right in to take my stop before rebounding away. After that paranoia had me write my stops down and then manually exit trades that reached them.

I kept a trading journal and kept account of my P/L, plus did a nightly debrief on how (and why) the day had gone.

On a good day I'd make 500 bucks, on a bad day I'd lose 1000. The nightly tally showed I was slowly getting poorer and over time was not getting better.

It got to a point where I'd spend couple hours researching my picks then enter trades in the opposite direction as I came to understand the market was not behaving to any of the indicators or patterns I'd learned from any of the hundreds of Guru trainings I'd been through.

About 6 months in I came to realize that even with my account size intra-day was too hard to play, so my time frames move to weeks then months. I finally entered a trade that I was convinced about which went against me for 5 months. I'd decided to stay long in the stock regardless as I was that sure. The stock blew through any rational limit I would have set and I decided to wait for it to recover. I eventually sold for a 40% loss through fear that the company would go bankrupt.

At one point in the year I was 15% up. I'm out now (apart from my first stock) for a total loss of 15%.

I've never really failed at anything and have been very humbled by the experience. Learning so much in a short time about trading and then failing to make it work has left me with the feeling that knowledge, a strict trading plan, and the willingness to put in full time hours really offer no guarantee of preserving capital let alone make a healthy living.

Respect to those that make it work. For a time I was one of you but for now I'm poorer and out.

Can I ask which gurus you purchased training from?

 

[medic]

I mostly read ebooks but also watched recorded seminars. not the full list but:

Dave Ladry On Swing Trading
Dynamic Trader Workshop
Stock Trading Course Tony Oz
Technically Speaking
jake Bernstein The Compleat Guide to Day Trading Stocks
Barry Rudd - Stock Patterns for Day Trading and Swing Trading
Building Winning Trading Systems with TradeStation - Wiley
Day Trading Primer
Day Trading University
Elder_Alexander-Trading For A Living
Jeff_Cooper-Intra-Day Trading Strategies Proven Steps
John Bollinger - Bollinger On Bollinger Band
Larry Williams-Long-Term Secrets To Short-Term Trading
lucas and le beau-day trading systems and methods
mark douglas-trading in the zone
The Stock Trader - Tony Oz
The Intelligent Investor
Barbara Star - Hidden Divergence
Barry Rudd - Stock Patterns For Day Trading And Swing Trading
Ben Branch - The Predictive Power of Stock Market Indicator
Bill Williams - Trading Chaos
Chan, Jegadeesh & Lakonishok - Momentum Strategies
Daniel A Strachman - Essential Stock Picking Strategies
David Dreman - Contrarian Investment Strategies - The Next Generation
Elder Alexander - Come into my trading room
Greg Morris - Candlestick Charting Explained

I guess the point of this was that after absorbing as much eduction as I could I found no system or pattern that was reliable. I do think some patterns increase your chances but with that edge you go from losing big time to just getting poor slowly. I got to a point where I could see such massive manipulation in the market that I found the playing field was unfairly stacked against a individual investor.

I started with the simple thought that I'd do as much research as I could for every trade I placed and would be right or wrong when I sold, i.e. a 50% probability + knowledge and tools would keep me positive. What actually happened was more like a 70/30 split against me so after all my efforts to learn and win I convincingly failed to make money.

I'm humbled by the experience and really dont know what more I could do to improve my skills to be confident about repeating the experience with better success.

 

[bbmac]

.....I guess the point of this was that after absorbing as much eduction as I could I found no system or pattern that was reliable. I do think some patterns increase your chances but with that edge you go from losing big time to just getting poor slowly. I got to a point where I could see such massive manipulation in the market that I found the playing field was unfairly stacked against a individual investor.

I started with the simple thought that I'd do as much research as I could for every trade I placed and would be right or wrong when I sold, i.e. a 50% probability + knowledge and tools would keep me positive. What actually happened was more like a 70/30 split against me so after all my efforts to learn and win I convincingly failed to make money.

I'm humbled by the experience and really dont know what more I could do to improve my skills to be confident about repeating the experience with better success.

Responding to your posts in this thread:

I understand about what you say about a quick or slow (by 1000 cuts) death lol but you are not untypical in your experience so far after all you are only 1 year in - it seems unfair/an inverse relationship that the more you seem to read/learn often-times the worse your trading can become, but this corner can be turned. Consistently profitable edges do exist and can be developed by individual traders even at the retail level.

This could either be that you have not found your edge yet - ie a set-up or set-ups with the right money management optimised to the metrics of the edge's historical and ongoing performance - that suits you - your personality type, and particular preferences needs that may be unique to you -and/or- it could be that you have found an edge but that the money management of it is wrong (not optimised to it) -and/or- that you have not developed the right psychological skills/attributes yet to enable you to trade it consistently profitably.

You really typically need to be thinking more 5 years not 1 year before you are in a position of being consistently profitable from developing/having/identifying a trading an edge - that suits you. You may see it start to happen in the 3-5 year period or you could be exceptional and it happen sooner but you are not in an untypical position after just 1 year, even with the hard work you have done toward the goal of becoming a consistently profitable trader, (assuming you have identified that as your goal - or have identified a goal.) Hard work guarantees nothing only that without it it will diminish your chances of achieving this or any goal even further.

G/L

 

[tomorton]

Great, honest post. Struck many chords.

 

[pboyles]

Try selling poetry, its more profitable according to The Guardian.

The £100 challenge | Money | The Observer

 

[ChocolateDigestive]

I feel your trading pain. Here are a couple of practical suggestions.

(i) Find profitable traders in your locality, visit them. Actually with your maths PHD you may have something you can offer them.

(ii) Have a think about what support and resistance is on a deeper level

(iii) I see you are in the US. If you are trading stocks there are a number of decent prop firms that cater for US traders, some provide 'basic training'. Bright Trading are well respected, I don't trade with them and have no affiliation

(iv) Specifically as you are a maths PHD you could consider a market neutral strategy, this could release you from directional trading and put you back into 'maths mode' - just a thought.

at some stage in the future you will reach another dead end, you will think the answer is more market knowledge, but it isn't that.

and good luck..

I've been live trading a year now and though it worth sharing some of the highs and lows of my journey.

I got into trading after my daughter was born. I'd taken 3 months off work and decided I could solely focus on day/swing trading with the 100K I had in savings.
Being in a technical profession (also have a PhD in math) my style was indicator/rule based and to that end I watched every trading seminar, read every blog and learned about all the technical tools I could over the first month.
I went live placing 10K-50K trades on stocks I'd researched and charts I or others had liked. Sometimes I'd stay in the trade a long time (I still hold my first stock bought), but mostly I'd be out before the close not wanted to suffer opening bell shock.

I entered stops until i got level 2 access when on too many occasions saw the action move right in to take my stop before rebounding away. After that paranoia had me write my stops down and then manually exit trades that reached them.

I kept a trading journal and kept account of my P/L, plus did a nightly debrief on how (and why) the day had gone.

On a good day I'd make 500 bucks, on a bad day I'd lose 1000. The nightly tally showed I was slowly getting poorer and over time was not getting better.

It got to a point where I'd spend couple hours researching my picks then enter trades in the opposite direction as I came to understand the market was not behaving to any of the indicators or patterns I'd learned from any of the hundreds of Guru trainings I'd been through.

About 6 months in I came to realize that even with my account size intra-day was too hard to play, so my time frames move to weeks then months. I finally entered a trade that I was convinced about which went against me for 5 months. I'd decided to stay long in the stock regardless as I was that sure. The stock blew through any rational limit I would have set and I decided to wait for it to recover. I eventually sold for a 40% loss through fear that the company would go bankrupt.

At one point in the year I was 15% up. I'm out now (apart from my first stock) for a total loss of 15%.

I've never really failed at anything and have been very humbled by the experience. Learning so much in a short time about trading and then failing to make it work has left me with the feeling that knowledge, a strict trading plan, and the willingness to put in full time hours really offer no guarantee of preserving capital let alone make a healthy living.

Respect to those that make it work. For a time I was one of you but for now I'm poorer and out.

 

[Pi3141]

Like many have said before, 15% isn't too bad an amount to lose in one year. I remember when I first started out I lost around 10-15% just in one afternoon.That'll teach me not to trade just after the US open and average down ever again. Learn from your mistakes and move on.

 

[ChocolateDigestive]

I've been live trading a year now and though it worth sharing some of the highs and lows of my journey.

I got into trading after my daughter was born. I'd taken 3 months off work and decided I could solely focus on day/swing trading with the 100K I had in savings.
Being in a technical profession (also have a PhD in math) my style was indicator/rule based and to that end I watched every trading seminar, read every blog and learned about all the technical tools I could over the first month.
I went live placing 10K-50K trades on stocks I'd researched and charts I or others had liked. Sometimes I'd stay in the trade a long time (I still hold my first stock bought), but mostly I'd be out before the close not wanted to suffer opening bell shock.

I entered stops until i got level 2 access when on too many occasions saw the action move right in to take my stop before rebounding away. After that paranoia had me write my stops down and then manually exit trades that reached them.

I kept a trading journal and kept account of my P/L, plus did a nightly debrief on how (and why) the day had gone.

On a good day I'd make 500 bucks, on a bad day I'd lose 1000. The nightly tally showed I was slowly getting poorer and over time was not getting better.

It got to a point where I'd spend couple hours researching my picks then enter trades in the opposite direction as I came to understand the market was not behaving to any of the indicators or patterns I'd learned from any of the hundreds of Guru trainings I'd been through.

About 6 months in I came to realize that even with my account size intra-day was too hard to play, so my time frames move to weeks then months. I finally entered a trade that I was convinced about which went against me for 5 months. I'd decided to stay long in the stock regardless as I was that sure. The stock blew through any rational limit I would have set and I decided to wait for it to recover. I eventually sold for a 40% loss through fear that the company would go bankrupt.

At one point in the year I was 15% up. I'm out now (apart from my first stock) for a total loss of 15%.

I've never really failed at anything and have been very humbled by the experience. Learning so much in a short time about trading and then failing to make it work has left me with the feeling that knowledge, a strict trading plan, and the willingness to put in full time hours really offer no guarantee of preserving capital let alone make a healthy living.

Respect to those that make it work. For a time I was one of you but for now I'm poorer and out.

another thought mate if you are trading US stocks. How much commission are you paying to trade 1000 shares? Most newbies pay way too much. If you are trading 1m shares per month $3 per 1000 would be a good rate through a prop firm, 500k per month $4 per 1000 would be a good rate.

this is all assuming you are trading US stocks....

just a thought as some people get destroyed by higher commissions which can really add up.

 

[sweatyslouch]

Hi, I swear all you need to do is take all indicators off your charts. Plot support and resistance using a 4 hour chart and then only trade at those levels. Buy support, sell resistance. If you get stopped out wait for a retest of the support or resistance that was broken to be retested and reverse your direction. The day it clicked with me (6 years before I became profitable every week) was when I completely embraced the idea that I have no idea if the market will go up or down. I do not care. Every time you analyse the market you are interested in, plan a trade that is a buy, and plan a trade that is a sell. This way you will never get married to the idea of wanting to be either long or short. By not having a bias you will always be with the flow of the market. You will never be fighting it.

 

[NVP]

I've been live trading a year now and though it worth sharing some of the highs and lows of my journey.

I got into trading after my daughter was born. I'd taken 3 months off work and decided I could solely focus on day/swing trading with the 100K I had in savings.
Being in a technical profession (also have a PhD in math) my style was indicator/rule based and to that end I watched every trading seminar, read every blog and learned about all the technical tools I could over the first month.
I went live placing 10K-50K trades on stocks I'd researched and charts I or others had liked. Sometimes I'd stay in the trade a long time (I still hold my first stock bought), but mostly I'd be out before the close not wanted to suffer opening bell shock.

I entered stops until i got level 2 access when on too many occasions saw the action move right in to take my stop before rebounding away. After that paranoia had me write my stops down and then manually exit trades that reached them.

I kept a trading journal and kept account of my P/L, plus did a nightly debrief on how (and why) the day had gone.

On a good day I'd make 500 bucks, on a bad day I'd lose 1000. The nightly tally showed I was slowly getting poorer and over time was not getting better.

It got to a point where I'd spend couple hours researching my picks then enter trades in the opposite direction as I came to understand the market was not behaving to any of the indicators or patterns I'd learned from any of the hundreds of Guru trainings I'd been through.

About 6 months in I came to realize that even with my account size intra-day was too hard to play, so my time frames move to weeks then months. I finally entered a trade that I was convinced about which went against me for 5 months. I'd decided to stay long in the stock regardless as I was that sure. The stock blew through any rational limit I would have set and I decided to wait for it to recover. I eventually sold for a 40% loss through fear that the company would go bankrupt.

At one point in the year I was 15% up. I'm out now (apart from my first stock) for a total loss of 15%.

I've never really failed at anything and have been very humbled by the experience. Learning so much in a short time about trading and then failing to make it work has left me with the feeling that knowledge, a strict trading plan, and the willingness to put in full time hours really offer no guarantee of preserving capital let alone make a healthy living.

Respect to those that make it work. For a time I was one of you but for now I'm poorer and out.

hey Mate

best post for a long time at T2w and I hope something a lot of newbies will read and learn from - especially from someone so qualified in numeric science

Trading is a brutal brutal world and not as (easy)as the winning sh*te peddled by vendors and brokers who should be made to be more realistic in their marketing like Cigarette manufacturers.perhaps even post the true % winners/losers they are delivering.....

keep going.......and find your path .........personally i feel that profitability is there in Trading .....but naturally the volume of trades needed to make a decent living requires the hunting of lower TF's where we are told more difficulties lie

Perhaps as a second stream of income but personally I will never trade full time relying on it to pay my bills...:smart:

like poetry.........

respect
N

 

[NVP]

Try selling poetry, its more profitable according to The Guardian.

The £100 challenge | Money | The Observer

The man stood on the trading Deck....
His finger on the trigger

The Dow pushed high

He pressed the Buy

and retraced down the river ........

 

[lee2good]

very nice post i am learning alot thankyou.

 

[tomorton]

Hi, I swear all you need to do is take all indicators off your charts. Plot support and resistance using a 4 hour chart and then only trade at those levels. Buy support, sell resistance. If you get stopped out wait for a retest of the support or resistance that was broken to be retested and reverse your direction. The day it clicked with me (6 years before I became profitable every week) was when I completely embraced the idea that I have no idea if the market will go up or down. I do not care. Every time you analyse the market you are interested in, plan a trade that is a buy, and plan a trade that is a sell. This way you will never get married to the idea of wanting to be either long or short. By not having a bias you will always be with the flow of the market. You will never be fighting it.

Could be as near the Holy Grail as we get: the implication being that there is no Holy Grail. If there was a Holy Grail, it would effectively give the user artificial power within / over the market, when maybe what we need less force used, to bend with the market more readily, to embvrace the riskl, not try to eliminate it with layered indicators, not to fight against the market, but to surf its power.