Out of curiosity sstheo, how did you blow your previous accounts? With your trading in these past few journals, it seems almost impossible. Like you say, even if you hit full stop, you just keep going. To drain a 10k account would require dozens of days of going on a tilt and revenge trading. But you certainly don't seem to suffer from this. So how did it happen?
I like to hear from everyone and see what good ideas there are. The BIG problem with POLITICS in the USA (and probably everywhere) right now is the increasing polarization: I don't want to only be in an echo chamber, so I welcome day traders, swing traders, and investors! There is much to learn from everyone. I can promise I will read all, but may not change a thing. What is danger for a trader? Major shifts in methodology. As long as people don't mind if I don't jump at their newest idea, then we will get along just fine...
A 24 page thread for an acct not even half way to PDT, really? Those that typically make $1M inside of a year from a small acct held positions with a cost basis of at least $50k - risking it all in the right stock/option/commodity at the right time, catching a one-off trend. Luck played a large role for sure.
Yep, and here is the story of one guy who made millions and then lost it all back and then some in a short period of time. It's a great read with a great lesson: HONOR YOUR STOPS AT ALL TIMES.
Before the micros there were only E-minis. Need I say more? Okay. I will. This is an semi-abbreviated version of my whole story of the last 14 years: IB Between 2005 and 2007, some freaking idiot who looks a lot like me took my $100k Interactive Brokers trading account and made lots of stock, ETF, option, FX, and futures trades. He had some newsletters with trade recommendations. Unfortunately, he took the account the wrong way and made it smaller and smaller and smaller and smaller until it was all the way down at $20k. After this 80% loss, he figured it was time to stop the madness. But after holding around there for about a year, while he researched what had gone wrong, eventually he took it all the way to obliteration. Yes, at that point, I was pretty dejected. But I didn't give up. I was persistent in trying to figure out what I needed to change. I knew if I studied enough and practiced enough, that I could become a profitable trader. So, I bought courses and went to town. FX And then I decided to go small. What was small? Foreign Exchange. I could open an account with just $100! A perfect practice field for sure. With 200:1 leverage I could trade one tiny position and not blow up!!! I learned FX and figured out some great things about how to trade and became a fairly consistent. After lots of initial small failures, I turned $500 into $4000 in just a few weeks. ZuluTrade I was then so confident that I signed up with ZuluTrade as a SIGNAL PROVIDER. After several bad starts, I did well and quickly rose into their "Top 100" tier (of about 10,000 signals). I eventually got to #50 and had over 100 subscribers with over $1,000,000 in subscriber funds that were following my signals. But before I launched that system, I carefully studied all the other winning systems on ZuluTrade and discovered that almost all of them SUCKED BIG TIME! The Risk:Reward parameters were way out of the realm of reality. Some were taking 200 pip risks to make 10 pips! The very same guys had posted that they guaranteed a 50 or 100 pip stop, and then promptly ignored it when in a draw-down. And many of them said something like "10 concurrent open positions max" but then went on to open 15, 20, or even 30 trades at the same time! Without question, "Martingale" was the #1 favorite alcoholic beverage of all those ZuluTrader providers! It should come as no surprise then that most of those signal providers eventually BLEW UP. So I made a decision that I would establish a reasonable stop and stick with it - no matter what, knowing I could always get back in later. And that is how I got into the top 100. Subscribers saw that I was winning, yes, but perhaps more importantly, unlike most signal providers, I was actually trading the way I said I would. I didn't over-leverage and honored my stops. Imagine that! More than win, those subscribers didn't want to lose. Well.... I don't remember the economic or political situation, but the FX market was moving rapidly in one direction. And even though I honored my stop and my position sizing, I started to fight the move. And I kept fighting the move. Even though I didn't blow my account, I lost the confidence of 90% of my subscribers. So I learned a bit too late- don't fight the move! and that staying FLAT in dangerous markets is just as important as honoring stops. Yes, my exit was honored, but there weren't enough winners over those few days to compensate. (Actually going with the trend would have been a great idea, but that is a different post...) Sometime later, the Dodd-Frank act killed FX in the USA, and I had to stop trading FX. I went through probably 8 international brokers. One by one they said," we don't work with U.S. clients." Futures So I finally left FX and opened an account with Global Futures (are they even around any more?) and later AMP. I started trading futures. But I was way over-leveraged with even one E-mini in a small account. $2,000 became $1,000 and then $500 and done. Make more money.... Then $2,000 > $1000 > $500 again. Over and over and over. I joined signal services and chat rooms. Just enough progress to keep me coming back, but ultimately, I failed again. Funded Accounts Then I tried TopStep. Then OneUp. Then LeeLoo. I spend over $9k on combines over 4 years. I ended up earning 4 funded accounts from OneUp and two from LeeLoo. But I blew them up each time. THIS BEING SAID, I noticed that I traded better each time, and better because I was being watched. Micros Enter the Micros! As mentioned, the micros saved me. I could finally trade small again like with FX. The account blowing-power of the micros is still present, but at 1/10 the destructive force. ET Journal Power I have finally figured out that while good entries and exits are paramount, consistency is really the foundation, because "full tilt" still could rear its ugly head again at any time. One of the reasons I am on EliteTrader is because having "somebody" watch me is very helpful to me. And my very best combine was the one with the smallest max drawdown. Some traders have discipline like a steel trap. I don't. So I am trying to compensate by doing this journal. This journal forces me each day to refocus and keep my rules. Yes, with $7k, I could load up with 7 or more full ES contracts and make a killing. I could easily double my account in one day. Of course I won't do this and risk losing it all, but I could see myself breaking my rules and trying 1 or 2 ES contracts in order to get 10% to 20% in a day. Or maybe I would start to overnight swing trade with the MES (micro ES), only to find my account down $200 instead of up $100 as I planned, because I just "knew" which way the market was going to go overnight! Or maybe I would just trade one or two micros, but not set my stop because of my confidence in the direction of the market. But no. All of these stupid behaviors are now (mostly) a thing of the past. No More Blowouts Will I blow out this account? Maybe. But I think I am in a position more than ever before to take all the hundreds of "Lessons Learned" and carefully, methodically, consistently, and "slowly," grow this seed of an account into something awesome. sstheo
I know I speak for some here in saying thank you for your personal history and journey, and how you came to this place at this point in time. It is appreciated, and interesting!
He is probably referring to the Pattern Daytrading cutoff of $25,000. https://www.investopedia.com/terms/p/patterndaytrader.asp