Someone asked in a recent comment to one of my articles if I could write-up my history of becoming a professional trader. I have no doubt my path was similar to many of you. There was wasted money and big losses and most of all a stubbornness to admit I didn’t know it all and that trading wasn’t a game to be dabbled in. It is a serious business, and I am ashamed to admit that it took me ten years to admit that and to start taking things seriously.
Like I said above I struggled in the markets for close to ten years before I decided to get serious and make a commitment to either get serious and succeed or quit totally. I bought many so-called systems over the years that told me I would make millions in a matter of weeks and sometimes days. None ever did!
For a time from 1998-2000 I thought I was a genius because I ran a $30,000 account up to nearly $200,000. Unfortunately, that was at a time when you could buy just about anything, and it would fly higher. It all came crashing down and before I knew what was happening my formally $200,000 account was back to $40,000. Hey, it wasn’t that bad, I made $10,000 right? Well, it was that bad, you don’t want to know what it feels like to see $160,000 go up in smoke in a matter of months.
That was about 2002. I got an email from a firm that was offering a free class on technical analysis in my area. Since I wasn’t doing anything that night I decided to give it a shot. It was a three-hour course on a Friday night designed to sell their trading seminar. I listened and what they were talking about made a lot of sense. It was all based on technical analysis. I was leaning against buying the course though because I had spent so much on scam systems before this and it wasn’t cheap, if my memory is correct, it was nearly $4000. But I just didn’t want to waste any more money. After the seminar I was talking to the moderator, and he made me an offer that I couldn’t refuse. They were offering the course the next day and if I wanted to attend, I could attend the first four hours. If I didn’t like what they were talking about I could leave no cost. I could then decide if I wanted to stay for the remainder of the course. With nothing to lose and nothing planned for the weekend I took him up on his offer. I loved the first four hours of the course and decided to stay. They offered a second course which I also took the following year. Basically for $8000, what I learned in those two courses is what you learn today in Live Traders PTS course which includes many more topics those courses did not include for a fraction of the price.
After the courses I just played around with swing trading for many years. I would make money for a time and then would have that one big loss that would wipe out months of gains. I really didn’t have a real trading plan during those years. Whatever it was I had scratched on paper I couldn’t follow. This went on until 2007 when I decided to try my hand at day trading. Pretty stupid right? Maybe, but my reasoning was since I had no patience, day trading was the way to go since things happen quicker. OK (rolling eyes). I joined the firm’s trading room for the first time.
The first few months my plan was just to follow the moderator calls and that proved to be a disaster. Remember that $40,000 account I mentioned earlier, it mostly went up in smoke. I’d make money for a few weeks and then I would blow it on one or two trades where I would fail to take my stop or some other dumb mistake. When I tell you that you can’t make money from following moderator calls, trust me on that, I know from experience what I am talking about.
After a few months of that nonsense, I reached out to one of the moderators for help. He suggested stepping back and working on a trading plan that I could stick to. I took some time off; I did a retake of the courses that I had previously taken (the firm allowed free retakes) and put together a trading plan and tested it on paper over several months. I also studied psychology as it relates to trading because I came to realize that I was pretty good at reading the charts, but I had very little patience or discipline.
Long story short, I started trading again in early 2008 with $25 risk. It took a lot of time from then to become profitable. I didn’t make any money that first year, but I didn’t lose either. Most of the next year was more of the same but toward the end of the year I did make a little money. 2010, the third year into my quest I finally turned the corner and started making money. It wasn’t enough to leave my day job, but I was heading in the right direction. By the end of 2012 I was at the point where I could have left my day job. However, I decided to keep working anyway mainly because I liked the job I had, and I was at the time living in California. I could both work and day trade. I eventually retired from my job in 2015 and have been trading full time since.
What was different in 2008 from my previous attempts at being a trader? The difference was that I not only wrote a well-defined trading plan, but I also wrote a long-term plan for success. All successful businesses have to have plans and those plans have many layers. It’s the same with trading. We all know we need a trading plan, but we also need a plan to handle everything that goes along with trading.
My long-term plan was designed to get me to the point where I could leave my job in 5 years. The plan allowed me to clarify a lot of things I had not thought of. The things that were really needed to bring meaningful success. The things you should be doing day to day that you really don’t think of when developing your trading plan. Speaking of trading plans, it is still a big requirement. Your trading plan is part of your business plan. It’s your day-to-day process. It’s the nuts and bolts of what you do day in and day out. My 5-year plan worked almost flawlessly. I left my day job just short of the 5-year mark.
Here is a link to an article I wrote to get you started on creating your long-term business plan: Long-Term Plan for Success
Key Take Aways from this blog:
- You need an education.
- Don’t let money for your education hold you back, the cost of not having an education will be far greater.
- You need both a trading plan and a long-term plan for success.
- Technical’s come easy, the mental game is what’s likely going to hold you back (I didn’t talk much about this in the blog but I have in many previous blogs.
If you need help with your trading, read on:
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