Choad is correct in his assessment. My assumption is you get your kicks during the run-up phase . Once the account gets large you lose interest. My solution is every 4 months take all the profits out and leave only enough in your trading account so you feel challenged again.
I don't thinks it's "losing interest" as much as the very same leverage that lets you get 1000% return in 4 months is the same leverage that will wipe you out when a string of losing trades comes along.. That sort of return alone screams "over leverage" and poor risk management. For some perspective: One account he started with 2.3k, and closed out at 8k in 6 months, and he considered that as blowing up.. thats a 247% return in half a year - the best in the world would give their left nut to be able to regularly do that. I have little doubt Dario is able to look at this in hindsight and see this.. but it seems there might be some guys new to trading out there who think the 1000% in 6 months is actually realistic That sort of return should be the same as hearing the "tick tick" of a time bomb waiting to wipe you out any moment...
What happened to him is pretty common to guys who are relatively new to the game. They take incredible risks, use excessive leverage and get lucky on a few homeruns to overcome their stack of losses and then suddenly acquire the Superman complex even though they still don't really know what they're doing. The early success was probably the worst thing to happen to him because that has probably corrupted his sense of reality and given him a misleading illusion that gains of that nature are statisically common and easy as cake, so he's probably going to continue taking extremely large risks to try to re-achieve those numbers as soon as he gets a new account. Unfortunately, the results of blow ups will inevitably re-occur if he revisits those extreme levels of risk-taking again. Hopefully, he'll take these messages seriously and learn to manage risk in a much more conservative manner. If you aim for ridiculous returns, be prepared for ridiculous and very painful losses.
Set the "not the right strategy" and "not enough experience/wisdom" stuff aside for a moment. Instead, look at your underlying psychology. You may be dealing with self-worth issues (no joke, and no offense intended). There are plenty of ways that we self-sabotage, and these are usually tied to unconscious/subconscious beliefs that we have about ourselves and whether we truly deserve (or even want) success or not. I suggest that you read Jake Bernstein's "The Investor's Quotient" to get started on understanding what drives you to trade and what drives you to give all your earnings back to the market. It's only a start, but a good one at that. I am sure that while you were undoing your hard-earned fortune, some part of you was bewildered at how it seemed like you were on autopilot, flying to your destruction. It probably seemed like you were floating outside yourself, helplessly watching yourself smash your account to bits with trade after uncontrollable trade. "Why did I just do that?" you'd wonder--knowing full well all the while that what you were doing was a mistake, and yet you did it anyway. I'd know, because it happened to me. I couldn't handle the elation of winning (discussed in the book) that many gamblers find themselves addicted to. In me, my adrenaline-fueled false sense of invincibility led me to self-sabotage as if to teach myself a lesson that no one is impervious to loss/defeat (old Greek tragedies would call this "hubris.") To those of you who might brush this aside as nonsense, I'd say that you should reserve judgment and examine yourselves more closely. Those of you who are consistently successful in trading over the course of many years have either worked out most of your psychological issues (or may never have had any problems installed during your childhoods), so you may not be in a position to empathize. And to those of you who are not consistently successful yet that may scoff at this, I'd say that you are either ignorant or in denial of your inner saboteurs. They are there, because if they weren't you'd already be as successful as you want to be. That's what's beautiful about free markets and free nations--you become whatever you want to be. The question is, what do you really want to be, including not only your conscious desires but your unconscious programming (defense mechanisms, etc.) Good luck to all in your pursuit of the main two types of success: happiness (congruence between all of your desires and your realization of those desires) and wealth.
You have a discipline problem... You said it yourself. Thus, knowing what other strategies others are using, changing your own trade strategy to what someone else teaches... Most likely will not help unless someone at the prop firm gives you a guarantee they will help you resolve whatever it is that's causing your discipline problems while trading. If not, your first and primary priority is to identify and resolve what's causing your discipline problems. Once you've done that... Then you can test prop firms, test other strategies et cetera. Simply, if you don't resolve the causes for your discipline problems... Those problematic trading days will visit you again. NihabaAshi
Just a guess but you'll do it again....you're doomed to repeat your mistakes until you learn from them. 1. Don't quit your day job 2. Get Vector Vest or IBD and invest (8% liquid capital) in safe p ) equities w/stop loss. 3. Don't actively trade for at least one (1) year 4.Examine yourself and determine what's wrong. 5. Perhaps change your diet---fast, detox the body---quit harmful habits. 6. Study.....study.....study. 7. refer to #6 btw: I wish you well
The problem is that you have not defined your strategy and have no confidence in it. If you did you would not even consider prop firms. Or you do have a good strategy but are emotionally unstable to trade it. Emotional education is something the books cant really teach you well. Only the market can do that I personally am a very emotional pscyhopath with a variety of mental disorders. It cost me 20K to confirm that. I have adjusted my trading style to my weaknesses. Its all about knowing yourself. Define your system before you lose your shirt. At least then if you lose you will know why. This makes it easier to readjust accordingly.
I say it is very unlikely for anyone to be able to string that sort of return together consistently for several years. the best CTA's don't manage to come even remotely close. I have never known anyone over the past 7 yrs to pull it off - everyone who came close eventually blew up. They were just a flash in the pan. Some might say it's easier for a small trader to do it vs someone trying to move millions. If this was true, then the hedgies and CTA's with the "millions" would just divy it up among a pool of "smaller" traders (not unlike a "fund of funds").. Find me just a few such traders, and I would fund them myself
It IS easier for smaller accounts to post higher %'s, it's only logical. The last prop firm I worked at there were at least three guys who broke 100k that year with 50k accounts. That firm was nothing special, so I'm sure other guys are doing it. Hedge funds with 100mm can't divy it up to smaller traders because quality talent is impossibly hard to find. Obviously, trading is not something everyone can learn otherwise this scenario would have occurred. So, if you use the magic 90% (percentage of traders that fail) that people always spew out then you realize why this plan doesn't work. OBVIOUSLY if you could find these guys you would fund them. That's exactly what all their investors said..... Not to mention that if you were able to look into the big trading house's shops you'd probably see that their returns on the amount of money at risk is probably phenomenal. I have never been, but look at Goldman's last quater... I'm sure the real % (amount put to work vs pl) is actually what people here would call "unbelievable". "flash in the pan" is meaningless to me. Yes, lot's of people blow up, but it's a skewed statistic, if you ask me. How many times are you gonna hear about a group that is wildly successful, quits while they're ahead and moves on to bigger and better things? It's not exactly front-page news, not to mention anyone who does this is usually ultra-paranoid of having their secrets revealed, or losing their stash. The only difference between a wildly successful trader and a flash in the pan is they didn't know when to quit/change/adapt... -The New Guy