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.
Be brutally honest with yourself and do an analysis of what happened. Figure out what worked and what didn't
The beauty and ugliness of the markets - when conditions are right for your method you feel like a genius but when the conditions change you feel like the biggest idiot. The key is being somewhere right above the middle of those two.
Many of us have been through that. I cleaned up during the tech revolution and gave it back during the bear of 2000-2001. A rising tide lifts all boats but your experience showed that you are not yet a trader. Shorting is often a better opportunity than going long but neither will work without a viable trade plan with appropriate risk management. I would recommend stepping back for awhile to work on and test your strategies. You are likely mentally beat up as well and could stand to take a break to refresh the batteries. The markets are not going anywhere and will be there when you are ready. My early wins were really meaningless from a professional standpoint but my losses showed me that there was a lot of work ahead....Good luck.
Always protect capital after such a huge gain, and invest in either mutual funds or ETFs that mimic the S&P and/or Dow Jones index. If you set aside the $1m instead of trying to pyramid the profits, then you stand to gain an 8% annual revenue stream over time, regardless of any future draw. Of course, hindsight is always 20/20. Since you still have 100k+, you'll have to climb your way back by evaluating the strategy and examine what really caused the 14 month of downturn, especially when you had a track record of consistent monthly gains. Next time around, set aside a percentage of profits for long term investing as stated above. Just my 2 cents.
Thanks I think that's great advice to take some time off and refresh the batteries and work on my strategies.
Thanks, also a hard lesson I've learned now. My parents gave me the same advice at the time I was actually making money and I didn't listen. Next time no one will have to tell me.