Ok, so basically i want to write exactly what is going through my head, (my life story) and see if anyone has ever experienced something similar and see how to get over the hurdle. I started trading when i was 21, as a side job to going to university. I always wanted to learn about the markets, and when the opportunity arose to become a day trader i jumped all over it. I basically knew going in that the hypothetical income the trading company i started with was bullshit as i started out prop and no one inside my firm was making money. Anyways i made, what i now deem to be a poor decision, however let me tell you how it all began. Basically i started out and six months in i was already better than every trader within our "branch" inside the firm. There were other traders making huge money at other "branches," and that was always what i aspired to be. To make a long story short i was making roughly 10k a month after the first 6 months then after a year i hit pay dirt, i figured out a strategy i could make 100k a month at (only 50% was mine.) Well i managed to make about 200k, take home, over the next few months. Then my strategy failed in a big way. Not only did my day trading strategy fail but i also fucked away all of the rewards from the previous few months in a personal trading account, way over leveraged. The next few years i dealt with tax problems as the IRS wanted a piece of that 200k, and i had fucked it all away(in my trading account), so the next few years was spent catching up. Anyways, most recently i finally found a strategy, which i have kept meticulous records on, that appears to be maximized and extremely consistent Now my problem is that i am having trouble pulling the trigger, even though 2 years of stats all line up to this being right and being worth alot of money if it works, i have some kind of fear that somehow my record keeping is going to go sour and this will just fuck up like the last one when it failed. I have habit of just getting rid of all my positions the second i get up 1-2k as opposed to letting it work itself out as the system requires. Basically on my "PROFITABLE" days i always cut my profit short out of fear that i will give it back. Yet i have no fear of letting my large "losing" days run against me. I always seem to have some ingrained fear that whatever "strategy" i am doing is in the process of collapsing so i may as well take profit now, and even when statistical analysis lines up the second i have one or two bad days i am panick stricken that the current system is failing me. Now i know the basic solution will be "cut back size so it doesnt matter" but the problem is i need the current size to pay the bills, and cutting short at that exact moment keeps me alive (even though statistics say i should hold onto the size and let it work itself out), and paying the bills. So now my question is, "how do i dive into this?" Knowing it is a fully functional system, and if i was to let it ride i would be much better off. Clearly i am trading this system completely dysfunctionally, as the only real thing i need to do is "hold onto winners," for some reason i cannot bring myself to do it, i have my 5k a month goal in mind, and need it to survive but cant jump the hurdle. I seem to have a permanent fear of systems failing me. (As this was how the first one worked out, and when it failed it ended up failing big time.) Any help???? Thx!!
Go back to your job and trade a size your are comfortable with. Start small, grow big, even if it takes you years. In the end you are better off than starting big. Appreciate the power of monthly compound interest instead of trying to earn several thousands a day and live in fear. What is being accomplished with that approach? Assume you can achieve 5% on average per month with that strategy and have $100,000 starting capital. In 5 years that's $1,867,918.59 already. Be patient, think of continuous growth and don't even attempt to strike it big.
Everyone has gone through this. Trading for most people is a zero sum game. Its kind of like there are only 2 types of motorcycle riders. Ones that have crashed and ones that are going to crash. And on top of that, just because you have crashed once, doesn't mean that your not going to crash again. Tough game.
Now you understand the downside risk to this game. I think it's perfectly normal for you to feel this way. Study this fear, overcome it with comfortable size.......YES, instead of making 1k a day, see if this strategy can make u $200-300 on a consistent basis. and eventually build enough confidence to overcome ur fear. Use this fear as your greatest weapon......in a long run, it'll save you alot of $$$$. And hopefully you won't blow up again.
I'm going to take the opposite stance. Go for it. Put your money where your mouth is and accept that you might win or you might lose, but by your best estimates you're most likely to win. This is really a question about believing in yourself and being honest with yourself which is paramount to everything you do in life. However, I don't think after reading your post your in such dire straits as you claim to be. IF on the other hand you REALLY need the money now to pay bills, trade small, and use the extra capital you would have been trading with to pay the bills.
What happens to price afterwards, when your strategy plays out?Why not take the 1-2k,then wait for the move to play out before trading on the reaction,in effect splitting your strategy into 2 parts? The advantage is less exposure and confidence building in seeing the same thing play out over and over.Then increase size/holding time.
Sounds like a martingale mathematical example. You were doing very well and one trade kill a lot of profits. 99 winners canceled out by 1 loser. I would just take baby steps and have realistic monthly goals. If you have a 100,000 account, you should aim daily for $500 - $1,000... It may depend if you are a scalper. But you have to take what the market gives you and I don't know how you trade so the estimate can be different. Plus you will have losing days. So take baby steps and set goals within the boundaries of safe leverage.
you are sort of a poster child for newbie traders. There is a reason that 95%+ fail. it si about LONGTERM profits that make a successful. I don't consider someone as making money after 6 months as successful. The "Risk of Ruin" will hit almost everyone. It is a matter of WHEN rather than IF In other words, you were probably weay ahead of yourself in your thinking about success.
PEN WIN, You are going through what most traders go through. It's a barrier that keeps 95% of them of ever being successful traders. If you've ever had a chance to ready about successful traders, they all have very similar characteristics. You HAVE to have a plan..not a plan in your head, no. A quantified plan. What does this mean? It means you know your edge, you know your probabilities of success on the trade and failure. Pulling the trigger as they say is an extremely important part of trading. Ed Seykota said a great thing once. He said "If you don't bet, you cant win, if you lose all your chips, you can't bet" It's something I take very seriously and all traders should. Remember having a quantified plan of knowing your expectations of the course of say 1000 trades only allows you to move forward. One suggestion that I make to all my students is to go to a hobby store and buy 100 marbles. 30-40 white marbles and 60-70 blue marbles and put them in a jar in your desk. Recognize that each trade is not a winner, but that there are more winners than losers. Each time you get a loser look at that jar and realize, its just one trade. What is one trade in 100? 1000? It's nothing. Just as Kobe Bryant doesn't care if he misses a shot. You have to have an expectation of what to expect. If you have any other questions, feel free to contact me.
I am trying to piece together your trading career, I need some time points, hope you can fill in. Which year did you start prop? and How many years you spent catching up?