The Mental Side Effects of Full Time Trading – The Gutter to Highs

I wanted to write this post and reflect on the last 3 months of trading and maybe help you out with when you get it in your mind that you just want to quit and give up on day-trading as very few know, I was extremely close to that point just 2 short months ago.

Let me tell you what happened, how it happened and what you might be able to learn from it, but first, let’s rewind back to mid 2014 (I am not a writer so my apologies if this is hard to read. I may or may not use affect/effect in the right context as well) You should read all the way through, or the ending wont make sense.

I had been trading for nearly 4 years part time at this point in my every growing struggle of becoming a full-time day trader.

I knew that I had a strategy, I had a plan and I had a goal in mind, all of which I knew were very achievable.

April 2014

I was finding daily consistent small gains of around $200 per day, to me this was fantastic. Along with these small wins I would have the occasional $1000-2000 winner which really got me excited for the future and knew that this was for sure something I could do on a daily basis. What was I using? What was my strategy? Plain and simple it was things I had learned over the last 4 years of LOSING money and what to avoid and what to hammer into and use patience on those trades.

Things were going very very well, I grew my accounts very quickly from Mid 2014 to around Nov 2014 then something happened, something I was waiting for and knew would accelerate my learning curve. The long anticipated DVD from the person I followed the longest on Twitter @investorslive. I was always hounding him on HOW he did what he did and why he did it (entries and exits mostly, I am sure I drove him nuts at some point via twitter) You can read more about the DVD on that link but needless to say it gave me the insight into his mind and what he was looking for on a totally different level, he was at the point I wanted to be at and this was going to help, IT DID.

After watching the DVD (about 3 times) I really started to hone into what was working and what I was best at, my entries were getting better my holds were getting better and exits, everything was working perfectly. Once again my accounts grew exponentially for 3-4 months into 2015. It was at this point I remember and now preach a rule that he may or may not have coined. DO NOT start full-time trading till you have your trading account money and 2 years of your salary in the bank. I was at this point, I had done it! I was going to take the plunge into full-time trading.

June 2015 

Now started the journey I had really been looking for since 2010 and decided I wanted to do this for a living, everything was hunky-dory and i was consistent on a daily basis with a sound set strategy, but boy was I wrong.

Once you actually take that plunge and now your sole income is dictated on how well you do each day, it really can start to affect how to take your trades, where you exit and enter.Then something even more that you begin to focus on is that PNL screen. It becomes more and more of a thing you think about each and every second of the day and will (at least it did for me) drastically change how you trade, why you took the trade in the first place and when you exit. I had to adjust, I had to do something, but what???

I didn’t, I couldn’t, I tried and tried but it was something that I just couldn’t get around for nearly a year, it was a struggle and I knew it was affecting my trading in a way I did not plan for whatsoever.

So, I was stuck I found myself losing consistency and my uptrend stalled at times and even took downswings. DID I REALLY DO THE RIGHT THING??? Can I really do this full time? What do I need to do?? All of these and even more ugly thoughts kept running through my mind and found myself upset at the smallest losing trade, downright pissed off. This continued until mid to late December when, at that point, I was actually planning on stopping full-time trading, I felt defeated, but something happened, something I did not plan for and did not expect.

“Cody, I really see something in you and really think you can help others” 

This was the message that I got and it absolutely floored me at the time, the person that I essentially respected the most in trading and watched for 3 years, said this to me, ME, MEEE?!???? What this did to me mentally was a complete reversal from abyss that my mind had put me in. I was on vacation and it felt like a Christmas gift, an extreme honor and something that instantly changed my view of my trading.

January 2016

Nate had offered me the opportunity to host a webinar on my trading and how I functioned based on the trades I was taking. This really made me look internally on myself and I said, “Well shit, if he sees it in me and reminds him of himself, I know I am doing something right” Immediately I had a big upswing in January and it again felt like I was doing everything right, I was on point and my mentality had changed. I spent hours going through my trades and ideas I used to host my first Members Webinar on January 20th 2016 and It felt amazing to share these ideas.

Everything continued as normal, I started to see success again, in myself and in my trading, it was all peaches and cream UNTIL… I took a big loss and everything from January and nearly February was gone, just like that on a few stupid overnight holds. I let myself get down on myself and back to the choppy weeks of trading continued for a while.

I noticed myself getting more frustrated on the smaller losing trades and focusing on just taking gains as soon as I saw them, completely going against the reason I took the trade in the first place. This went on for a while and I again, was getting mixed results with an overall slight uptrend. Then I had April, one of the hottest months I had ever had full time trading, then something happened…yet again.

May 2016

I had done it again, I let my self turn on myself and I just had to write about it and get the thoughts on digital paper. I wasn’t trading the way I knew was consistently making me money I had gone back down that rabbit hole of dark ugly thoughts.

Again my trading suffered and the months of mediocre trading continued.

September 2016

It was the fresh start of a month and August had been good to me, I had a few great days at the end of the month and decided to press it and increase my size about 2-4x my typical trades. It worked. For about 2 days then I started to fight one name during the day, adding size on each little pull..and the next, and the next..Till it washed out so hard I was staring at one of the biggest losing single day-trades ever. I was rocked, or so I thought at the time.

I was angry, furious and downright an ugly person to be around (just ask my wife).

I wanted to get it back, all of it plus some. So for no good reason I did the exact same thing one more time, but this time it was even bigger. How much bigger? About 6 times bigger of a loss then the biggest one I had just ever had, ONLY TWO DAYS PRIOR.

I was smoked.

Done. (well not totally done, but close enough)

Let me Crawl into this hole over here and let the world pass me by.

These were my thoughts, each day, every day, every waking moment. I had screwed the pooch and it will take my months to get this back. WHAT DO I DOOOOO??? This is what being at an all time low will feel like, not just in the $$$ amounts but in the mental part as well. You begin to talk to yourself in ways you didn’t really think you ever would “YOU IDIOT. MORON. LOSER. GO GET A JOB, YOU SUCK” were all the trolls really right?? Or worse yet, would I become a troll myself. I wasn’t really sure what to do and worse yet I was about to meet everyone face to face.

October 2016

It was looming in the back of my head, Vegas, how the hell am I going to face these people I have been trading with day in and day out while I am in this mood I am in. I was terrified. My trading was crap, I was about to just hang up the full time hat and go back to part time for good.

I decided to take 2-3 days off completely and I just sulked on the couch until this little itch in the back of my mind said, “Why are you self loathing you jackass, get up and figure out what the fuck you are doing wrong”

So I went the route of looking back at things, appreciating the good in my life and what I can done up to this point. I felt a little bit better about things, it’s not so bad when you think about it. This in turn made me go back to reading some of my old blog posts and one of them really stuck out to me and it was my absolute favorite setup/strategy. The one that made me decide to start trading full time in the first place. The one that made me LOVE what I was doing.

After I read this and watched my own video about trading psychology and how I based a lot of my entry points on I decided if I saw one of these setup’s I would throw caution to the wind and just go for it. Low and behold the very next day it happened.

I was packing my bag, being done for the day. I was coming back to turn off my screens and shutdown my computer and then I saw it…..

SUNEQ

“Wait, why is SUNEQ on my high of the day scanner”

So I pulled it up and it was like the stock god’s had heard what I wanted and gave me a gift I will never forget. The perfect setup, the one I dream about in my sleep (I know you do too) I immediately did what I said I would do. SIZE (with a set risk in mind)

I took as many shares as I was ok with being pissed off about if I was wrong $ wise on the loss and went with it. It started, nhod here, nhod there..ripping..nearly 50% gainer I was shocked and completely calm all at the same time. .07 .08 .09 it was just flying…I took some off…the gain was Huge…enough to put me in a fantastic mood for vegas, and that was really all I wanted at the time.

Traders4aCause Conference

By far one of the best events for any aspiring trader to attend along with golf (DAVID RYAN & I DID WIN, Or should have by the way, we shot a -7 total) it was just amazing to listen to the speakers and meet as many of you as I did. It was a fantastic time and can’t wait until next year.

Rest of October 2016

Day after day, play after play, the Q’s, the pot stocks, the plays and the gains were UNREAL to me. It was as if I was dreaming and it just wouldn’t stop, it was more money each day then I had made ever. I was on such a mental high and I had probably a 95% win ratio on all my trades with the losers being so small it didn’t even phase me. All of the preparation and trades were becoming 2nd nature. If I saw it, and liked it, I went for it and boy they did not let down.

I went from all time lows to all time highs in the matter of 6 trading days. It just didn’t feel real and it didn’t until I started taking the money out and realizing it. HOLY SHIT did I just do this, did I actually make this much this fast on trades with massive conviction. Yup, I guess I did.

So here we sit (well stand now, and Ill be doing a video on the desk this weekend) and I couldn’t be happier with my trading and my overall life in general. I have had 1 losing day in the last 30+ trading days and I have toned down the massive size and stuck with the strategy that has worked so well for me.

This all leads me into the main point of this blog, and if you have read everything up until this point, you deserve a medal or something as I felt like I rambled on for a while. So here is YOU’RE PRIZE

Trading to me is 95% mental.

Let me say that again,

95% mental

WHY? because once you stop saying so many negative things to yourself and start saying everything positive, you will soon see yourself starting down the path that will lead to to where you want to be in this game and in life.

I hope you start today, now. Tell yourself you CAN, and I WILL

Best of Trading to you all,

OddStockTrader

 

P.S. This book is bad-ass if you want more on the mental aspect of trading

  • short trade

    Well said..im going through this grind man it sucks go from a winning streak to horrible days came back from huge wins on shippers and bam gave it all back ..like you said focus on the one strategy that we are comf with and keep your mental thoughts positive….Thanks for writing this ..really appreciate it!

  • short trade

    Well said..im going through this grind man it sucks go from a winning streak to horrible days came back from huge wins on shippers and bam gave it all back ..like you said focus on the one strategy that we are comf with and keep your mental thoughts positive….Thanks for writing this ..really appreciate it!

  • Jaytee Ali

    Amazing blog brother, very inspirational. I am a begging trader and I would just like to say thank you so much for such an amazing blog post filled with wisdom, experience, a little humor, and all honesty. Very empowering I guess Nate was right about you when he said you have the ability to help others. This blog helped me alot to realize how important the mental aspect of trading is.