Let this be an inspiration for those still struggling

[FlourishingWeee 44]

Hey everybody,

Today is quite an important day for me.  I've finally managed to get back to break even after being in the red for 4 and a half years since I started day trading.

I'll be honest, I was starting to doubt my ability to ever become a profitable trader at the end of 2020, and I thought about quitting.  Investing so much time and effort for years, only to see money disappearing from your account is very hard on morale, of course.  One thing that kept me going was the fact that, even though my account wasn't getting better, I felt like I was always making a little progress on both the technical side and the psychological side.  I figured if I kept going, one day, I would finally turn the corner.  Well, I turned that corner at the end of 2020, when I changed my approach, strategy and tools all at the same time.  It took me 4 years to lose 25000$, and only 6 months to make it back.  And frankly, I'm pretty excited to see what the next couple of years will look like as I'm only starting to ramp up my size.

I wanted to share this with you guys because this chatroom is one of the reasons why I was able to make it work for me, and I figured it could help motivate and inspire anyone that is still struggling to find their marks and make it work for themselves.  As you can see from my total realized P&L of the last 4.5 years, I had a pretty long and difficult journey.

I just wanted to say this:  As long as you feel that you're progressing at least a little, and if you like what you are doing, make sure that you give yourself the time and the tools to keep going because you never know when you'll be turning that corner.  I surely didn't expect it, not more than a year ago I was about to call it quit, and it would have been a monumental mistake.

 Let this be an inspiration for those still struggling.

[zulkafil 38]

Nice to see the reversal specially in the last 6 months. Congratulations!! 👏

[Alastair 114]

BIG BIG CONGRADS !!!   Was wondering if u could expand some more on this info by answering the following questions for struggling traders:

1. the large drops in acct was "hulk" days ?

2. Which tools u changed ?

3. General or detailed info on strategy/setups and or risk reward as u profits are also very dramatic ?

 

Again congratulations, the journey must have been hard but u stuck to it and ur resilience was rewarded.

[CarloNe 4]

Well done!!!! That's really inspiring.

If you could say one thing that really switched from losing to winning patterns in 2021, what would you say?

[FlourishingWeee 44]

18 hours ago, Alastair said:

BIG BIG CONGRADS !!!   Was wondering if u could expand some more on this info by answering the following questions for struggling traders:

1. the large drops in acct was "hulk" days ?

2. Which tools u changed ?

3. General or detailed info on strategy/setups and or risk reward as u profits are also very dramatic ?

 

Again congratulations, the journey must have been hard but u stuck to it and ur resilience was rewarded.

Thanks!!  Sure, here we go:

1. the large drops in acct was "hulk" days ?

Yes, some hulk days and some "deer in the headlights" days. 😄

2. Which tools u changed ?

I went from DAS to TWS+TradingView for 2 reasons:

1- I wanted to trade options instead of shares, and TWS is much better than DAS for trading options
2- DAS is pretty expensive and I felt the monthly cost was pushing me to take trades to "make use of what I was paying for" and I wanted to remove that pressure.  TWS is free, and TradingView is pretty cheap (around 300$/yr) compared to DAS, and I was already using TradingView for technical analysis anyways., I just love those charts and I find they are less taxing on my computer when calculating indicators in real time.

3. General or detailed info on strategy/setups and or risk reward as u profits are also very dramatic ?

I used to scalp shares of stocks in play at the open using momentum, ORBs, engulfings, etc... kinda like what Andrew is doing.  I was watching at least 4 to 6 different stocks every morning.  I was also watching the level2 and Times and Sales for my active stock.  I was using the automatic share size calculator by Kyle.  It's complicated to explain exactly why it wasn't working for me but anyways... When I almost gave up in December of 2020, I decided to give myself only 5k$ for the whole year of 2021, and if I lost it all in the first week, just too bad, no trading for the rest of the year.  And so, with such a little account, I had no choice to try options trading.  I figured I would try to do the same thing as before, but scalping options instead of shares, and watching only 1 stock instead of 4 or 6.  Since TSLA was and is still my favorite stock to trade, I decided to only look at TSLA every morning for a while and try to scalp options on it.  It took a couple of months of setting up my new tools and adapting to this new strategy, and I almost blew up in the process (see the big drop to -27000 in early 2021, my account was less than 3k$ at that point), but I was able to recover and it finally started paying off.  I also bought a macro keyboard to give me better control of my keyboard shortcuts and I feel like it made a big positive impact.  I couldn't see myself trading without it now.

So basically, I simplified my trading in many ways.  I ditched the Level2 and Times and Sales windows, those were just too much information for my brain to process at the same time.  I also went from watching multiple stocks to only one, which allowed me to really connect with the price action on the stock and feel what it wants to do a lot better.  And I switched from shares to options and futures (I watch TSLA and MNQ for the market, so I will sometimes take trades on MNQ when I don't see anything on TSLA that I like), using only 1 contract on any normal day.  Sometimes I will take more contracts when I'm absolutely certain of a move (I know there's no such thing as 100% probability but some moves can get pretty close to that) and I'll go up to 5 or 10 contracts which allows me to have those bigger green days.  I also reduced my trading time to only the first 15 to 30 minutes most days, on rare occasions I will trade for the entire first hour but I try to avoid that as much as I can.  Once I'll have a little green cushion (let's not forget I only reached break even yesterday), I will slowly increase my standard position size to 2 contracts instead of 1, then 3, 4, 5 etc.  I'm hoping I can get to 5 contracts standard for the end of 2022, but we'll see.  Right now I'm aiming for between 200 and 1000$ per day, and my max loss is around 500$ but its all good as long as I keep it under 1000$.  I usually have 3 or 4 red days per month at most and they are usually more between 200-300 than 500-1000.  Part of the simplification was also letting go of the chatroom, so I don't come in anymore, I trade alone, in silence.  I can focus better and read the price action more accurately without the distraction.

I hope that answers your questions, if you would like any other info, let me know! 🙂

[FlourishingWeee 44]

16 hours ago, CarloNe said:

Well done!!!! That's really inspiring.

If you could say one thing that really switched from losing to winning patterns in 2021, what would you say?

Thanks!

There are so many things that came together to make it happen, it's hard to choose only one.

I would say that the biggest help was switching from shares to options, as it kinda forced me to take more risk (you can't take less than 1 option contract haha).

I think one of the biggest problem I had was that I would take very little risk and make very little profit, then I would be frustrated to make so little money on the biggest opportunities, and I would then manage to have hulk days on bad opportunities because of that built up frustration.  So when I switched to options, I started making more profits because of the bigger minimal risk involved, and that fixed something on the psychological level.  I got confident I could make money, finally, and losing wasn't as big of a problem as before because I would be able to recover faster.  That kinda tipped the balance in my favor (because I already had a good win/loss ratio, its just that my wins were too small compared to my losses) and gave me confidence.  And it all went better from there.  There was definitely a big psychological thing I had to get over about risking money.  I used to be afraid to risk 20$, now I don't mind 200$.  I hope that makes sense.

But simplifying my tools and watching only 1 stock was probably as important.

[zulkafil 38]

FlourishingWeee,

Thank you so much for sharing in depth.  Congratulations again and wish you all the best.

 

[Bailey Nevener 83]

Congratulations!  How do you manage your risk on those options trades?  Is it similar to Kyle’s hot keys on DAS?  Or do you cut it manually?

Edited January 22, 2022 by Bailey Nevener

[FlourishingWeee 44]

2 hours ago, Bailey Nevener said:

Congratulations!  How do you manage your risk on those options trades?  Is it similar to Kyle’s hot keys on DAS?  Or do you cut it manually?

Thanks!  I trade directly on the contract chart using ChartTrader hotkeys in TWS and a macro keypad for quick entries and exits.  The risk is pretty easy to calculate for options, for 1 contract, a 1 point move equals 100$.  I get out of the trade manually as soon as it's not doing what I expected, be it a small win, break even, or small loss, it doesn't matter.  I don't enter the trade and stay in until I either hit target or stop loss.  I actively manage the trade and as soon as something doesn't seem right, I get out.  Since I'm scalping, I'm usually in and out in a couple of seconds most of the time but I might hold for a couple of minutes when I get a good entry and there's momentum.

[CarloNe 4]

8 hours ago, FlourishingWeee said:

Thanks!

There are so many things that came together to make it happen, it's hard to choose only one.

I would say that the biggest help was switching from shares to options, as it kinda forced me to take more risk (you can't take less than 1 option contract haha).

I think one of the biggest problem I had was that I would take very little risk and make very little profit, then I would be frustrated to make so little money on the biggest opportunities, and I would then manage to have hulk days on bad opportunities because of that built up frustration.  So when I switched to options, I started making more profits because of the bigger minimal risk involved, and that fixed something on the psychological level.  I got confident I could make money, finally, and losing wasn't as big of a problem as before because I would be able to recover faster.  That kinda tipped the balance in my favor (because I already had a good win/loss ratio, its just that my wins were too small compared to my losses) and gave me confidence.  And it all went better from there.  There was definitely a big psychological thing I had to get over about risking money.  I used to be afraid to risk 20$, now I don't mind 200$.  I hope that makes sense.

But simplifying my tools and watching only 1 stock was probably as important.

Very well done!!!

and thanks for the answer. You have done a courageous move to switch to options (big change) and a stunning work to build up confidence. As I said, very inspiring.

[Paul aka Aurbano 83]

Awesome achivement @FlourishingWeee 🙂 my most sincere congratulations ! you already got me with "TWS option trading" hehe Hope you can use this thread from now on to give us all some update about those option trades with some beautiful screen-shots!

In case that helps anybody, just wanted to share a couple of resources to setup TWS charting and options trading :

Forum thread :

 

Youtube video :

for

[Erwann 13]

On 1/21/2022 at 2:36 AM, FlourishingWeee said:

Hey everybody,

Today is quite an important day for me.  I've finally managed to get back to break even after being in the red for 4 and a half years since I started day trading.

Thank you very much for sharing your experience. 

What a journey you had! 4.5 years...you have an amazing mindset to not quit before.

For options, do you use the sames strategies you mentioned for stocks? 

I don't know nothing about options but your P&L curve with a smaller account (5k) is so impressive 🤔.

Edited January 24, 2022 by Erwann

[FlourishingWeee 44]

18 hours ago, Erwann said:

Thank you very much for sharing your experience. 

What a journey you had! 4.5 years...you have an amazing mindset to not quit before.

For options, do you use the sames strategies you mentioned for stocks? 

I don't know nothing about options but your P&L curve with a smaller account (5k) is so impressive 🤔.

Thanks!!  My wife says I'm stubborn, I say it's determination 😄

About the strategies, I'm trading some momentum ORBs and engulfings with options too but I don't have "setups" that I need to see for opening a position.  Anything goes, really.  I read the price action and when I see a good risk/reward and I feel probabilities are on my side, I get in for a scalp.  It's very fast, I'm trading on the 15 second chart.  And like I said, I'm not afraid to get out quick if it's not working out, I don't use stop losses, I just exit the position as soon as I don't like what I see or feel.  Options move so much that you can't be too patient if it doesn't work out.  It's high risk, high reward type of trading.  If you get stuck and don't cut your loss, your position can actually go to 0 by the end of the week at expiration, you can't turn it into a long term hold.  But you can also make over 100% on your position almost any given day, especially on Friday expiration.  I've seen 100% moves in 1 minute happen and over 20x in a day would have been possible if you bought and held for a couple of hours, it's crazy.  It's like penny stocks on steroid, but the underlying stock is a large cap that can be more predictable imo. 🙂

If you want to see what scalping options look like, check out Matt Diamond on YouTube.  Funny thing: I came up with this option scalping strategy by myself during my 1 month break when I almost gave up in December of 2020.  I thought I was a genius because I had never seen this before.  Then a couple of months later I discovered Matt's channel and I was like: "wow ok, he's been doing that for years, I'm late to the party, but glad I'm not crazy, its possible to make it work lol".  We're both scalping options but we're doing it very differently.  He was using the 2 minute chart last time I watched him, and he waits for specific setups to take an entry, mainly flag breaks and ORBs.  Most of his days are 2 or 3 trades at most whereas I can take 10 to 20 trades no problem, especially on a day like today where things are moving.

[Erwann 13]

Thanks @FlourishingWeee for your answer. I'm going to watch this YouTube channel for dure as I'm so impressed by your experience. The best would be that you share a screen recording of one of your trading session 😁.

I'm my one year full trading and still having hard time to become profitable. Screentime is incompressible... I still have few months in front of me before I need to get back to my full-time job and I won't be able to trade during the day 😱.

Do you have any recommendations for me please (that you would have liked to get before your 4,5 journey)?

Edited January 26, 2022 by Erwann

[FlourishingWeee 44]

20 minutes ago, Erwann said:

Thanks @FlourishingWeee for your answer. I'm going to watch this YouTube channel for dure as I'm so impressed by your experience. The best would be that you share a screen recording of one of your trading session 😁.

I'm my one year full trading and still having hard time to become profitable. Screentime is incompressible... I still have few months in front of me before I need to get back to my full-time job and I won't be able to trade during the day 😱.

Do you have any recommendations for me please (that you would have liked to get before your 4,5 journey)?

There are so many things to say on this topic, I could write a 200 pages book on it.  In fact, I've been thinking about lol.  I remember reading Andrew's book and being very fascinated by his experience and how he managed to be successful.  It was a great source of inspiration and knowledge for me.  I feel like I have a lot of things to share that could help others in the same way, so maybe I'll do it down the line if I manage to be really successful and make tons of money like Andrew lol.

Here are a couple of pointers to reflect on:

- Don't underestimate the importance of having a balanced life.  Full time trading when you're still not profitable and learning is a very bad spot to be in, both financially and more importantly, mentally.  Change your schedule or find a day job that will let you trade the market at the open for the first 30 minutes to an hour every day.  That's the best time to trade anyways, and sitting at the computer looking at charts all day isn't going to do you any good imo.

- Trading in a paper account is the best gift you can do to yourself, for as long as you aren't profitable.  I was stupid, so I dug myself a big hole that destroyed me psychologically and probably added 1 or 2 years to my learning curve.  Someone smart would open an IB account with the minimum required amount, pay for the minimum market data, and trade in his free IB paper account using TWS and real time market data for as long as it takes to become profitable.  Keep your costs down so you can do this for a long time.  What you need is to practice and learn as much as you can, without destroying your bank account.  Once you've proven that you can trade profitably for 3 months, then you can go live and test your skills with real money.  But going live from the start like I did was really dumb.

- Don't put pressure on yourself.  Trading needs to be a side project while you're learning, it must not define your life.

Some more things I would be tempted to say would only apply to the kind of trading that I'm doing (like my first point), and will be different for other type of traders, so I won't go there too much.  But it's important to know what kind of trader you want to be or can be.  Some people like fast action and scalps, some others prefer long setups they will hold for 15+ minutes.  They are both very different styles and advices that would apply to one will not apply to the other.  I'm a scalper so I can give you advices for that, but that's it.