The Beginnings 

    February 2015 was the month I placed my first day trade. Of course at the time, I had no real strategy or knew myself as a trader. Like many others, I was thinking this would be an easy start to a streak of gains, after all how hard could it be, right? Watching video lessons, DVDs, reading blogs and websites, I felt confident that I would soon catch on to this. Unfortunately, I had a good short on one of my first trades, which gave me even more confidence that trading was "easy". $1,000 gain in 10 minutes. After this, like many other traders that are too confident, gave back all my gains, and then some. For 7 straight months, I had been consistent, consistent at losing. 

First Profitable Month and First Biggest Loss

     September 2015, turned out to be my first profitable month. This and the fact that the previous months losses had been getting smaller and smaller, gave me the confidence that I was finally catching on to the art, or science of day trading. I planned a strategy to scale my size significantly, push hard on October, as this could potentially be my turning point. First day in October was green, and this gave me confidence to push even bigger size. This led to the second day of October, which turned out to be my biggest loss, $-2300 day. I had never imagined that I would ever stare at a loss of this magnitude, after all, this almost represented my sum of losses to this day. My losses were essentially doubled YTD. 

Devising a Plan and a Comeback

    I have been known in other endeavors to be a comeback player. After this loss, I spent even more time in strategies, and decided to devise a plan for the month. Inspired on other traders like Tim Grittani, Nikkorico, Modern_Rock, the goal was to aim for singles , and not home runs. My biggest loss up to that point had actually started as a nice gain, which I hesitated to book, because of greed, or overpatience. 

    October 2015, started off with my biggest loss, but I calculated that if I could make ~200 per day, I could erase the loss by the end of the month. This strategy led me to book gains, and leave green on a consistent basis. I only had two losing days on that month, and 18 green days. This was mostly because I was trading scared, over conservatively, and booking singles. I was able to grind out a second profitable month. Was confident at my stats, as I was having a 80-90% win rate for the month, for being so conservative. At the end of the month, I was feeling very good about my trading, so decided to push hard on November. I had seen a lot of traders on Twitter get rewarded by their patience, and knew that I wanted to give it a try in order to have bigger wins. 

Overconfidence and Fall Back

     Patience is a virtue, right? After two good months, I wanted to be patient, and have bigger wins. Push hard for a good November, and close of the year. The first trading day of November, again like October gave me a big set back. I could not find shares to short of a stock, so ended up trading another mediocre setup. The month continued, and I would not pay myself when the stock turned in my favor greatly, because I wanted to be more patient. I was turning winners into losers constantly, and found myself closing the position, only when it went against me, since I would hesitate to pay myself.

    Veteran's day was a holiday, so I could finally have the whole day to trade. This is fantastic, I would finally have all my screen space, and be able to use a real workspace to trade. The day started, and I could tell the day was going to be slow, since there were no big movers premarket. However, this was my day, it was a holiday, and I could finally put all my focus on the market. I decided to force trades, and even had two simultaneous positions, which is something I usually never do. I was also going full size, all in, very early. When one turned against me, ended up covering both emotionally, even though one of the would have worked out fine. Long story short, after around an hour, I was staring at my biggest single losing day. I lost close to $-10k, and felt embarrassed, disappointed, and really questioned if this is really for me. After all, trading is a profession in which , it does not really matter how much time you put, or how much effort, you will only be judged by your results. 

    After this loss, I refused to take days off, and have made the situation even worse, since I have been basically on tilt, and forcing trades, and entering too early with too much size.

Summary of Mistakes

Here are some of the mistakes that I have done, hopefully it helps some:

·       Forced trades on arbitrary factors (e.g. Holidays, No shares available for other good setups)

·       Over-patience, not paying myself, and looking for the Home Runs

·       Wanting to make back losses, instead of focusing on consistency

·       Shorting stocks with SSR, Day 1s, and still frontside of the move

·       Fighting trends, fighting the overall market

·       Guessing tops

·       Not waiting for golden setups/opportunities

·       Going "all in" too early, not leaving room for adds

·       Using too much size in mediocre setups

·       Forgetting that small gains add up quickly

·       Seeing more experienced traders be more patient and trying to emulate

·       Pushing too hard for a good month

Have a good weekend all, 

 

Manuel