As I approach the completion of my first year, I write this to share what it was like for me getting started on my journey to becoming a professional day trader.
While I was skeptical at first, in this first year I’ve experienced every phase that’s common to everyone trying to consistently earn profits from the stock market. Even though I read countless books and articles, watched videos, and heard from friends about all the common mistakes that many traders make, somehow, I still found myself committing those very same mistakes. I started off strong, screwed up my strategy, and emotionally hindered my profit potential, all to end up where I am now regaining momentum. Of course, in hindsight I can’t imagine what on earth was I thinking when I did such foolish things even though I knew better.
My Market History
Prior to day trading, my experience with the market was passively investing in the through IRAs, 401Ks (as well as the military equivalent) and passive investing tools such as Betterment (one of my favorite BTW) for several years, not really knowing much about what I was really doing. However, a business conversation with my brother in March of 2017 sparked my interest to really start building on my knowledge of the stock market.
Of course, learning something new is a challenge in and of itself, but this is one of those areas of life where the grass is always greener on the other side. The more I learned the more I realized the market wasn’t as complicated as I originally assumed. Before, I always felt it was way too complex and boring for my taste. I would hear all the financial jargon from the “experts” and people on TV that would just make my head spin, resulting in me just simply forking my hard-earned money over to others to make the investment decisions. Can you relate?
Somehow, I can still remember in detail when my high school economics teacher derailed from the curriculum a bit to teach us what he knew about the stock market. Back then he tried to get us to understand how wonderful the market can be, but I wasn’t trying to hear it at that time. Like most of the people I grew up around, the stock market was definitely not glorified or looked at as a serious way to grow wealth. As a young teenager, it didn’t appeal to me at all, but somehow that brief moment of time in my history always stuck with me.
Knowledge: Fuel for Success
I spent about 2 months just consuming as much information as
I could from all the free resources I could find by way of Google and YouTube. While I was fully aware of the various paid resources available on the internet, I was determined to learn as much as I can by only paying with my time. I didn’t want to just simply learn a specific “proven strategy” that someone had for sale. To me this was too limiting, and I really wanted to have a thorough understanding of what I was doing.
Plus, all of the most successful traders and investors that I know of are self-made. As stated in the book The Warren Buffett Way, “It is only from your own ideas that you can create greatness.” Not saying that you can’t learn from others, but everything that you learn should be internalized and used to shape the greatness that can only come from within.
Put Me in the Game Coach
Once I felt comfortable with what I was learning I started testing what I leaned with a short period of paper trading, then making my first trade with real money in equities by June. Before you get all excited, this is not going to be one of those stories where I became a millionaire overnight. Let’s just say I did well enough in the first month that I did not blow up my account.
Now, I have to mention during this time I was temporarily out of a job due to medical reasons, so I didn’t have a ton of excess money to risk. But having all this free time did give me ample opportunity to sharpen my trading saw. Plus, thanks to all my knowledge building, I knew the amount of cash I had to throw at the market had very little to do with how successful I can become as a trader. Many would say it’s better to start with a small amount of cash since it can be a motivator for taking it seriously. Learning to preserve capital is vital.
By the time I was able to return to work, my interests had shifted to the futures market. I was introduced to futures by the book Mastering the Trade by John F. Carter. So just as I did before with equities, I set out to learn all I could about the futures market via internet resources to include the CME Group website that has a learning course. Once i felt I learned enough to start trading Futures, I thoroughly studied the charts to discover how I could take the knowledge I now possess to develop a solid strategy.
After getting my broker account setup so I could trade Futures, by August I was off to the races and instantly started catching success! I ended my first 2 weeks day trading Futures with a profit of about $3000 and was feeling good about myself.
What Are You Doing???
And then, I changed my strategy. WHAT?! To this day, I can’t remember for the life of me what on earth would possess me to completely change what worked very well so early on in my trading career. I just remember seeing something on the charts that I guess looked like it would work better. Actually, I believe I was focused too much on minimizing the loses. Now I know without a doubt that was just plain dumb! Loses are just a part of the game. It’s not really how much you lose, rather win bigger than you lose.
That first change led to more changes which led to me completely forgetting the strategy that made me so successful in those first two weeks. Eventually (about three months later), I stumbled back on the strategy that made me successful in the first place.
Full-time Employee to Full-time Trader
This point of my life was a major transition for me, leaving the employment world to give 100 percent of my attention to my trading business. So, it wasn’t an immediate turn around back to success. In those months of chaos, I developed a very unhealthy fear of losing and bad habits. The month of December was spent transitioning from my job in Kuwait to moving to the Philippines to pursue my entrepreneurial dreams. January was spent getting my home office space setup as well as my citizenship. By February I was finally able to give 100 percent of my focus to day trading Futures.
Trust the Process
Now, as far as the market was concerned, February was an awesome month full of opportunities with extreme volatility that the market hadn’t seen in years. Unfortunately, thanks to my earlier struggles, I wasn’t in a position to fully take advantage. I had to unlearn all the negative things I picked up as I struggled with my strategy and break a ton of bad habits. All of this while working to improve as a trader. Talk about a tall order.
I developed a plan and took it a step at a time, starting with the fear and emotions. This was the hardest to overcome. Facing fears and dealing with emotional roadblocks is hard enough but it had to be done. My financial life, and everyone affected, depended on it. The pressure was on, but I was determined to succeed.
In a nutshell, I used back trading to reaffirm confidence in my strategy and force myself to take trades based strictly off the strategy with the goal of getting comfortable losing. In any other aspect of life in our society that sounds insane, but for the market it is the golden key to consistent profits. This rebuilding process resulted in me seeing my first green month in May since that short period of success back in August.
This is Only the Beginning
With less than a month to go before completing my first year as a day trader, I have grown a lot. Not just as a trader, but in life in general. The market has a funny way of letting you know everything about yourself.
The market has drastically slowed down, which to me seems odd for an earnings season, but I’m sure all the volatility in the first quarter has a lot to do with it. At this point, every day I feel my skills and habits are improving. This year has been a very interesting rollercoaster of highs and lows, and I wouldn’t change a thing. I mean, yea it would have been nice to just trade the right way like how I started, growing my account without all the stress, but everything I went through made me the trader I am today. I managed to make it through a very rocky period that would have most people who attempt trading throwing in the towel and came out much stronger than when I entered.
Still, every day I am learning and growing, and I invite you all to experience this journey with me. Feel free to comment below. Share your experiences, thoughts, or advice. I look forward to hearing from each of you and building this community together.