Do NOT have a $1K Day Early

[Jeremy Kahn 3]

I feel I need to write this because I'm overly angry at myself and my psychology. 

I'm a relatively new day trader, having started about 4 months ago. Prior to that, I was a swing trader for a few months. However, prior to that, I was an active long term trader, Series 7/66 licensed and just all around focused on the markets, economy, etc due to my job as a corporate banker. So, I'm not new to the markets and economy, especially fundamental analysis. But, daytrading is NOT any of this. It is daytrading.

I was consistently profitable trading small shares. I would meet goal every day and figured if I can do it with small share size, I can up it and be profitable. Well, I started trading bigger shares and, by nature, the volatility rose. I would be down $200, but end up $200. Then, I'd be down $400, up $400. Well, I did it -- I had a $1,000 day on a High of Day break on Airbnb on it's IPO day. I felt on top of the world and that I was great. I really wasn't. 

Since then, I've lost nearly $2,000 trying to repeat this. I had one day where I lost $1700 in a single day, but managed to trade back to a $630 loss. Going big too soon was a huge mistake and I'm now realizing my mistake. I am not consistently profitable - I got lucky. Luck happens sometimes, but we aren't in the game of luck nor gambling. We are trading. 

Part of my issue is that I see all of the swing traders making a killing - I have true FOMO. I also see that I should just hold my positions for days on end and could do better than jumping in and jumping out on indicators. And I ask why? Well, here is why... I have devoted myself to daytrading and all of my funds. As I've learned, this isn't about guessing which way a stock is going to go and betting that it'll hit it. It is about intraday trading. Hitting a $1,000 day early was probably the WORST thing that could've happened to me. It has given me false confidence. As I continue to see my PnL go down, I have FOMO, ROMO, and all of the other OMO's you can have.

I hope you heed my advice - Focus on the PROCESS not the PROFITS... I hope profits will come, but I am going back to the basics now. Not worrying about another K-Day. Would it be nice? Sure. But, I'm not experienced enough.

[NikkiB 22]

LOL at all of the other OMO's.  It's humbling for sure.  I've been there - Oh I'm doing great on $10 risk, time to up it to $40, I'm ready for this!  Nope.  It is a process.

I have a friend who does everything but day trading - dividend playing, options, swing trading, etc.  And I'll get texts about how much he's made - got one today that he made $1200 in options on TSLA and was upset cuz he left $2000 on the table.  Here I am just trying to make $50 a day.  A couple weeks ago I realized I'll hear from him consistently for a week or two, then nothing for a month or two.  No big deal.  We live many states away from each other and just text for communication.  THEN I realized those long periods of times that I don't hear from him are when he's taken a big loss that he doesn't tell me about.  He never tells me about his losses, just his wins.  And his wins are usually really nice compared to my paltry $50/day goals - which means his losses much be pretty hard hits too.  So now, I'm happy for him when he texts his happiness, he's my friend and I'm happy for him - but I also know he has losses he just doesn't talk about.  And the big thing is - he trades how he wants to and I day trade because that's what I want to do - what we do is not comparable.

[Jeremy Kahn 3]

Yup. It’s so hard especially when we lose during the learning curve and we have a SPAC bubble, an EV bubble and others - it’s so easy to say I’ll buy 50 call options on NIO and hold for a week and make $100,000 — but, it could pop tomorrow. And then, I’m not in for the short during the day to make a killing. So, I’m probably making the wrong decision, but I’m committing myself to focus on what I want to do for a living: day trading. Not making tons of money on the new booms. Not speculating on the next SPAC. But something that I can learn to be consistent at for the next 30 years and have no limit on my earning potential. 

[TJ 1]

Great article Jeremy!  It is so easy to focus on results vs. process in SO many different areas of life (losing weight, starting a business, etc.).  This is amplified in trading because the results are simple - profit or loss, while the process can be complex.  We know our own process, but the process of swing traders on twitter might be hidden.  For all we know, they may not have a process and it could be luck.  I'm trying to make trading my job, so luck is out of the question.  I would much rather have a process for making $1K - $2k a day with great risk management (and get lucky on the fringes), then try to guess which $1 biotech stock is going to have a 10k% gain.  Thanks again for sharing!