Beginner Frustrations - Venting

[jplev206 2]

Hi all, 

Sorry if this ends up being a little bit of a rant but I need to get this out. 

I have been trading for about 2 months now and these past two weeks have been the worst weeks by far, I feel totally lost, out of control and pissed with myself. I've been breaking rules, losing more money than I should and honestly everything I touch just turns to shit. Even this morning I in a beautiful play on WKHS, I made a mistake taking a partial and sold all my shares while I watched it rip another 2 points. I chased it, didn't have a stop, panic sold and went from being up 50$ to down $110. The morning got worse from there, I took a call on a chart I didn't like, lost money, chased more stocks when the momentum had left, let trades go green to red and while I don't feel emotional or out of control I literally can't win - I've lost over 500$ a day for the last 3 days. 

This also coincides with a very stressful period in my personal life, a 3 year old who makes my life hell, a pregnant wife, and a struggling business. My burden is heavy and the weight is wearing me down. 

I just need to get some frustration out, I'm happy to hear any constructive advice. 

Thanks, JP

[Roberto 10]

WKHS is a WSB/reddit meme stock. I'd avoid those if you've only been trading 2 months. 

[Bailey Nevener 83]

Jplev,

 

This is an extremely difficult situation that I very familiar with. 

I was forced to work 12- 15 hour nights for 2 and a half years with a 40 minute commute and had 2 hours of sleep maximum every morning before I was able to trade.

I became 50k in debt when the stock market crashed with a job that only made 50k a year.

 

I was discharged from the military only a 3 months after this happened, so now I didn't have a job either.

My relationships were falling apart and I ended up quintupling down on trading an ended up getting out of it.

However, to get there I built a 25k account from 3k in 3 weeks.  Blew up.

Then I took the only 1k dollars I had left and used CMEG to get the account 4.4k in 1.5 weeks.  Then I blew up.

Then I took it a little more carefully and used my next months paycheck to take another 3k account to 5k, then to 8k, then to 10k.

I slowly built that until I was able to transfer my money into Interactive Brokers.  Then I took that account to 37k and paid off the remainder of my debts.

 

If you would like a similar result, I would recommend relying on day trading 0%.  In other words, do investing, or something more hands off.

Almost half of that amount I built in the final account was from investments.  It's just easier if you find a company that is undervalued and you can hold.

 

Practice sim on the side and let go of trying to make money with day trading.  It is very, very difficult if you need the money.

Those weren't the only accounts I have blown up before I became consistent.

It felt like a black hole and so discouraging the entire time, to the point I thought that all of this might be a scam.

Now I make money almost every single day.

Seriously, trust me, the more testosterone and desperation you have in your body, the worse you will perform.

You need to not want the money if you want to succeed easily. 

As for anyone saying not to trade meme stocks, yes they are 'difficult' in the sense that a lot of people don't have a trade book for them.

I love them.  Money printers if you understand them.  The get extremely directional which is what we want.

However, if you want consistency, I would recommend staying to environments that you will see the most often.

 

This is exactly what I would do if I were you and what worked for me:

First, state your plan to your significant other of how you are going to conquer this hurdle, and see if you can accommodate them in some way to make trading seem less stressful in your lives. 

Ask them for any suggestions on what they think might be the best way forward to build up a positive environment especially if this has been effecting your personal lives.

 

Close your live DAS account and switch to sim if you aren't already and be thankful you haven't lost all your money.

 

Next, look up stable investments that you can put your money into to grow.  This decision doesn't have to be immediate, but it does need to be quality.

I recommend taking a look at the channel "Financial Education" on YouTube.  This guy is weird, but he gets the job done like a champ.  Now that your money is safe and growing, you can learn with less pressure.

 

Third, watch Aiman's live trading video:  

 

Pull out a pen and paper, and observe how he does things.

This was one of the major keys for my success.  This video.  Not kidding.

 

Fourth, and this is VERY important, figure out your risk management ratio.  If you look at my journal and weekly recaps you'll see this:

RISK MANAGEMENT

Risk per trade (RPT):  $50

Daily Goal: $250

Max Loss : $250

Ratio:  50 : 250 : 250  or  1 : 5 : 5

This is a representation of how many tries I have per day to make money before I stop out.

Currently, it is five tries. 

 

Before I would risk $200 per trade and try to make $400 per day with $200 for max loss.  This is idiotic.  That's only 1 try! 

Even great strategies need multiple tries to work!  The confidence loss from just starting a trading day and stopping out immediately is horrible.

Reduce your risk per trade sure....  But WAY MORE IMPORTANTLY, increase the amount of trades you can get wrong before you stop out on the day.

 

Fifth, REALLY REALLY REALLY IMPORTANT. 

Go to DAS > Account Window > right click on your account name > Open Risk Controls

This page will prevent your from making further trades after you hit max loss, and it has other functions as well.

 

These are my current configurations, so just modify them to fit yourself.

Max Loss $240.

Total Loss $250.

Enable Auto Stop.

Count in Commissions.

Submit.

Doing this was a major catalyst to my success.

 

Now you can only lose as much as you specify per day,

you are emulating a proven trader's strategy,

you have a forgiving amount of trades you can take in a day,

and you have less pressure on your finances/emotions.

 

Subscribe to me on YouTube https://www.youtube.com/channel/UCkK2SWIsYGuWm1gtlbD2C4w

and follow my trading Journal 

 

If you are having difficulties with hotbuttons, strategy, or configuration and can't get the personalized response you desire in the BBT chatroom, join my session live on YouTube or Twitch in the morning and I will point you in the right direction.

However, I get off of the computer pretty much immediately after I hit goal amount, so it will probably help to catch me within +- 10 minutes of the open.

I am not a trading genius or anything, but if you are having a really difficult time with seeing results and it is stressing you out to exhaustion, think about reaching out to me.

I've been there.

 

Bailey Nevener

 

 

 

 

 

Edited June 4, 2021 by Bailey Nevener

[Roberto 10]

There's a play book for this?:

https://globalnews.ca/news/7917321/amc-stock-investors-warning/

“Our current market prices reflect market and trading dynamics unrelated to our underlying business, or macro or industry fundamentals, and we do not know how long these dynamics will last,”

“Under the circumstances, we caution you against investing in our Class A common stock, unless you are prepared to incur the risk of losing all or a substantial portion of your investment,” 

[Bailey Nevener 83]

3 hours ago, Roberto said:

There's a play book for this?:

https://globalnews.ca/news/7917321/amc-stock-investors-warning/

“Our current market prices reflect market and trading dynamics unrelated to our underlying business, or macro or industry fundamentals, and we do not know how long these dynamics will last,”

“Under the circumstances, we caution you against investing in our Class A common stock, unless you are prepared to incur the risk of losing all or a substantial portion of your investment,” 

 

I was in a trade on AMC when that happened.  

I was up on the day by a lot and got auto stopped.

You are correct, news events cannot be planned for.  

As a matter of fact, this is so obvious, that I know you are being ironic.

 

The correct way to deal with this is hard stops and risk controls.

Which I stated in my advice to the OP.

 

I don't know if you read what I said, but I turned 3k into 37k.  That was in less than 6 months.  

Once I got out of the Navy it was significantly easier to do because I was trading on more than 2 hours of sleep.

I can guarantee you that I am familiar with unfair situations in life and especially the hard-knocks of the stock market.  Especially in proportion to my income.

 

There were lots of news events in a ton of my trades during that time, and my playbook was much less refined than now.

If you can't reliably take advantage of the directionality of meme stocks, that's fine.

If you can't consistently make money from the stock market, that's fine.  

A lot of this success comes from trial and error and heavy use of problem solving skills.

Stock market isn't fair, life isn't fair.  What is your next step to be better for next time?

 

I would like you to reflect on this.

A lot of people that aren't into the stock market say, "Don't mess with the stock market, it's too risky."

A lot of people that invest say, "Don't swing trade that is too risky."

A lot of people that swing trade say, "Don't day trade that is too risky."

A lot of people that day trade say, "Don't trade meme stocks that is too risky."

 

Risk management becomes more complex the closer you get to minute by minute price action.

And certainly for stocks that are prone to news events.

 

Meme stocks have enough liquidity where hard stops and risk controls can get you through those anomalies.  <<<-----  Problem solving part

The opportunities they offer consistently outweigh the risks.

 

The next day I shorted AMC through 2 limit downs, I mean, where else do you get that opportunity with $50 stocks?

I have done this reliably with meme stocks, so yes, I guess there is a trade book for that.  

 

I have been doing this long enough and successfully enough to say that with proper risk management you can trade pretty much anything that is liquid and directional.

Not sure what I am answering to, but you are correct, you cannot plan for news events.  Just like on every stock.

 

How's your Trade Book coming?

 

Edited June 4, 2021 by Bailey Nevener

[jplev206 2]

Thank you for taking the time to reply to this, I sent you a DM. I appreciate it and will take it to heart. 

[mau 5]

Wow, thanks so much for that very detailed response @Bailey Nevener very detailed, I am learning a lot from it! 

[Bailey Nevener 83]

47 minutes ago, mau said:

Wow, thanks so much for that very detailed response @Bailey Nevener very detailed, I am learning a lot from it! 

You got it.  We all start somewhere.

[Fresh Prince 4]

It definitely sounds like you have a lot of mental stress going on that will absolutely reflect in your trading. I've been investing / trading for a little more than year, and I can say without a doubt that my mentality has changed like night and day when it comes to beating myself over trades.

As a quick back story before I make any recommendations... I went from investing to day trading when the market was recovering from the Covid dip. Trading was easy. All you had to do is trade on an industry that was beat down, and wait for it to go up. I went into trading with NO community, NO classes, NO charting experience, and worst of all....NO sim trading. I made a lot and lost a lot. Right now I am still hold over 10K worth of bags on a stock I was trading after hours and while drinking. Sounds stupid? Absolutely. I was so confident from making money the wrong way that I felt invincible, and once the tables turned on me... I found myself in a bad place mentally as well as financially. I currently work a 9-5 as well and find my self distracted a lot. So on to my recommendations ( I am only going by your post, I have no idea of your full situation )

 

1. If you break a rule you set for yourself, then it was a bad trade, no matter the P/L. This has to be your mentality in my opinion. If you find your rules being broken too easily without consequence, you may need to re-evaluate them and see if they are too strict or do not coincide with your trade strategy. You can even read through this forum and find posts where folks say " I broke my rule, but made money"  Rules have to be set for a reason, to protect us. 

 

2. Read Psychology in Trading books. And not just BBT books, but others to get different opinions and view points. This has changed my life dramatically, not only in trading. The mindset different books promote can be very similar and it is those lessons that I feel are the best since you have different people saying the same thing which helps to validate. Which leads to 3....

 

3. Meditation and breathing techniques. This doesn't really have to do with any religious belief, but it is more of a way to navigate stress when in a trade ( or for me, before I even start the trade day. ) It doesn't really seem to help until you have practiced it for a while, and it starts to take hold. You may not recognize negative stress and how it is weighing on you consciously, but when you have days like you listed, they will stay in the back of your mind and effect your future trades.

4. Use negativity from your trade decisions ( P/L can be green or red, doesn't matter. If you make money on a dumbass chase, it was a bad trade ) as a learning experience and look at them as such. This is one of the biggest things that has helped me emotionally in all aspects of trading. It has kept me from chasing ( which is my number 1 flaw ) .. I don't get mad at myself for missing a trade and therefor am not stressed into chasing. Have a bad day or three? Review them and see what you can improve on, instead of just writing them off as a bad trade and trying to forget them. You won't be able to, and until you reconcile with the decision, it will sit in your mind and effect your future trades.

 

Hope this helps, and doesn't come off as a "know it all" post, because God knows I have ALOT to learn myself, I just wish that I would have been part of a community like BBT when I first started so I could vent as you did and also look to mentors and other traders for advice or even just some comradery. Green days will come!

 

[jplev206 2]

Thanks Fresh, 

I appreciate the time you took. I've been diving into psychology books so far I'm done with the BBT and trading in the zone, working through market wizards now, do you have any recommendations? 

I believe you are right about rules, literally everyone says it so I know I need to get my shit together and follow my rules and or reevaluate them. 

I'm going into this next week with a new mentality and renewed rules. 

5 trades max 

Learning to actually scale into positions 

Leave if I hit goal - or switch to paper trading 

If I break a rule I must switch to paper trading for the next day. 

etc 

My biggest take away from your post is when I do stick with my rules, even if my trades lose I don't feel bad about it which reinforces what you're telling me. 

Thanks again. 

PS. I have never once in my (tiny 3 month trading career) taken a stupid trade and been rewarded for it. All my dumbass trades are losers which just speeds up my learning not to do that.