That's exactly what happened. I also made incrementally more every year starting from 1999 . 25 k lost was without a single major hit. It was like Chinese torture. It really was the consistent psychological pressure over the course of an entire year without any real success. Ironically I've had big losses as much as 10 k during my 10 year run and sometimes in a single stock (gmh was one in my 2nd week of trading. Flipped a 2 million buy moc at 340 to a 2 mil sell at 350. I had 2000 shares and lost 5 points. 110 wall street.
Many people who are successful today had unsuccessful starts - even financial failures. There are also people who were unsuccessful and left without turning back. If you don't have the "fire" then good luck in whatever you end up doing.
I was looking into some firm that could protect orders from manipulation such as Thor program which had the idea of slowing down the latency periods of all exchanges the order was being sent to to arrive at same time. Read that in flash boys book.
Use otm limit price , avoid market order to beat hft. Not many retail traders need to worry about hft unless you're trading > 1000s of shares.
No need to explain how the losses of 25k impacted you psychologically. I've seen people make more than you did and then lose less than you...they then take a break from trading because the losses (although small in comparison) were part of a bigger problem. Thus, it wasn't the dollar amount but more to do with other variables in their life that had changed that couldn't be resolved at the time but the trade losses was something they could easily talk about. I saw a guy have an unbeaten win streak for about 2 years in trading...go thru a nasty divorce and then lose a small fraction but freaked out...he acted like it was the end of the world after his first losing week of trading successfully in a few years. He comes to ET complaining about HFT, complaining about volatility, arguing consistently with other ET members, trash talking and many other things until he had to finally deal with the fact that the love of his life had left him for another man. We just don't know what other people are going thru or we don't know how something big/small will impact them in a negative way when trading had been going so well. It's like watching those superstitious athletes when they make it to the playoffs...they keep wearing the same cloths, don't shave, eat the exact same food every day... People psychologically get weird when they become winners and then flip out when they get losses instead of looking at the big overall picture about how successful they were. Those that have never had that type of success in anything will never understand or underestimate the impact on you by that small loss. An analogy via sports, I remember our team went undefeated for several years...broke many records. Yet, the first loss...the pressure was too much for one guy on the team. He acted like his life was ruined because that one college he expected a scholarship offer didn't make an offer when 4 others made an offer. He blamed it on that one loss. He got drunk one night (first time ever drinking)...got behind the wheel of a car and hit a tree. Busted himself up so bad that he was never ever able to play sports again. My point, we all act differently and if there's other issues going on in your life when that small loss occurs...its so much easier to blame someone or blow up the small loss way out of proportion as if it was some kind of devastation. That loss or small losses occurred at the wrong time in your life...its really just that simple. I hope whatever it was that caused you to step away from trading when you had those small losses has been resolved so that you can get back to doing what had worked successfully before for you. wrbtrader
Hey man great post. I can't really explain it. I remember coming up with a million excuses at the time too. Excuses and trading is an oxymoron. I blamed the hfts my latency my internet and so on. It was me and only me. I did not see it as a small loss. I saw it as a loss of opportunity. I also recognized that I was psychologically unprepared to trade any longer and so quit. I had assets. I could have pumped more money into my prop account and would have certainly lost it. I have a different perspective now. I have years of successful experience to draw on. I am friggin ready. I will really try to help new people here while I prepare. Of course at the end of the day everyone can't do the same thing. The more people that do something that works, the quicker it will stop working. But some things traders must do are timeless. Having accountability for your tradws is first and foremost.
I do not believe this. Not when millions, hundreds of millions, or billions of contracts/lots/shares are traded in a thing.
I made like 1.3 cents I wish hop MAybe it's changed since I traded. But my advice is erase ALL beliefs.
That still does not compute, it means that you are having an overblown fear of risk and possible loss. That is extremely rare in the way you described. Usually it's a lack of appreciation of risk or that many can't get themselves into a trade for fear of loss. If you displayed fear and frustration over a large single loss relative to your portfolio size and previous year gains then it would make sense. However you lost less than 10% off the previous year's gain over the entire year. You could have dialed down or taken a shorter break. Walking away from the whole thing in light of the pnl numbers you claimed you generated makes little to no sense. But carry on.
This scenario would never play out and here is why. You can't generate 275k in the first place if you respected your risk limits, and then a 25k loss is 5 times your risk limits or drawdowns? Makes no sense. Either he got lucky on the first 275k but in that process vastly exceeded his risk limits via over trading size or other means or he set his drawdown way too low for a strategy that swings this much...