What I LEARNED 60.000 £ Losing my first year as a full time trader

What I LEARNED 60.000 £ Losing my first year as a full time trader

During my first year as a local (independent trader) on the floor of LIFFE, I bought and sold 8804 FTSE futures contracts, about 40 contracts per day on average. The result was the loss of or 61.620 £ - £ 267 per day of trading. I was profitable for 55% of days with an average profit of £ 1.009, my average day was lost - £ 1780th My biggest one day gain was £ 7.730 and my biggest loss - £ 12,426.

As you can probably imagine, it was a difficult time for me. I was trying to work out how to make money consistently. It was the consistency that seemed so hard to find. As you can see I have regular experience of making money, it was killing me were my losses. It seemed that every time I went into the lead with 5000-6000 pounds within a week or two, you lose it all and several thousand more in the space of several days.

At that time I was very satisfied with my work should be prepared to spend my time analyzing results. If I had I would have found that during this period all I needed to do to go from a loss of 61.620 £ on a small profit would be to avoid just 10 trading days. They cost me 10 days total of 69.169 £!

At the end of this period I was so frustrated, fed up and stuck that I decided to quit trading and return to a more secure career. It only took me a few weeks to abandon this plan and return to trading. I felt sure I had the raw talent to become a consistently successful trader, what I needed, I reasoned, was some kind of support. Support me to stop a huge loss days that were crippling me financially.

I approached a company I knew that backed traders on the floor and they agreed to my back with 20.000 £ trading capital. We will split profits 60:40 and I was set an initial daily loss limit of £ 500th If I hit my £ 500 limit the firm's floor manager would come and tell me to go home. The third day trading I lost about £ 3500 and nothing happened, nobody came to ask me to stop trading. I felt very stupid, but continued to trade until the end of the week while avoiding any contact with the floor manager. Next Monday (the week had lost approximately £ 5,000) I got a message to meet with the director, with whom I had when the agreement (it transpired he was away from the previous week). I was sure he was going to say that the deal was off. Instead, to my surprise, he told me how important it was that he could trust me, he needed to know that when the market was volatile he could trust me not to be racking up huge losses. He suggested that I start over again. Needless to say he was relieved and grateful. So I went back to the trading pit that morning with the determined intention to not lose more than £ 500th

In the next two weeks turned out to be one of the toughest periods of my trading career and one of the most rewarding. Stopping when I was down was hard. I realized that what is at the base of my large losses was my inability to accept the loss of all. For me the loss was unacceptable. Such was my intolerance for loss that I lost for ten consecutive days. But as the days progressed, even though I continued to loose £ 500 a day, I found my mood lifting. I really started to feel OK to lose as long as it was within my limit.

At the end of this 10-day period of losses a seeming miracle happened, I started to make money. My goal was to get to + £ 1000 and then not give back more than 20% of my weight. So when I had a profitable day as I was between £ 800 and £ 2000, an average of around £ 1200th Not only will you start to make money, not so for 15 consecutive days, three whole weeks without a loss.

This marked the beginning of a new era of trading for me. In the past, I believe that I have been trading scared, scared that I was really loose. The two weeks of strictly sticking to my loss limit caused me to revaluate. I started to feel good about myself for sticking to my limit. Before it's bad if I lost money, now it's only bad if I lost more than my limit. Before that, I never knew whether I was going to make or loose 1.000 £ £ 5.000, and now I knew the worst was a loss of £ 500, and that is OK. I began to see that sticking to my trading limits is a sign of strength and my confidence began to rise.

Looking back on losing streak my first year, if I had restricted my losing days - £ 500 I lost 61.620 £ will turn into a profit of £ 83,525. Not only that, I think if I was sticking to a loss limit during that period, my confidence would be that much greater and my percentage of profitable days would also be higher.

. Our deepest fear is not that we are inadequate Our deepest fear is that we are powerful beyond measure It is our light, not our darkness that most frightens us We ask ourselves .. " Who am I to be brilliant, gorgeous, talented, fabulous? "Actually, who are we to be? You are a child of God. Your playing small does not serve the world. There is nothing enlightening about shrinking, so that other people will not feel insecure around you. We are all meant to shine, as children we were born to make manifest the glory of God that is within us It is not just in some of us, .. it's in everyone and as we let our own light shine, we unconsciously give other people permit. to do the same. As we are liberated from our own fear, our presence automatically liberates others. "

Whatever is at the root of our fear in order to become consistently successful traders we need to overcome by developing confidence in themselves, believe that we will always act in their interest. When we trade fearfully undermine ourselves and end up taking the very action that confirms our fear. The question is how to develop unshakable confidence in yourself?

We develop trust in others through repeated experience of them acting in a way that inspires confidence. In the same way to develop confidence in ourselves as traders by building a history of action that supports our goal to become consistently successful traders. The more often adhere to their trading plan and limits for our greater self-confidence. Now this sounds like a Catch 22 situation, if I find how you can not help yourself, how to begin to develop self-confidence through the right action?

In some ways I was lucky, my back is against the wall, I knew that if I broke my limit I will be out. So I had to stick to my limit and it will give you the opportunity to confront and finally reject my fear of being a loser. To go from being a net loss a trader with a consistently profitable, you need to set achievable targets of behavior. My problem is the loss allowing days to turn into huge losing days, so that you can set the objective of stopping trading for the day when I was down £ 500 was appropriate for me. For others the primary problem may be resistance to taking a trade when the signal comes up, be it intuitive or mechanical. Appropriate exercise will be to take a simple mechanical trading system (it need not be very good, break even would do) and set a goal to pursue next 10 signals without hesitation, regardless of how you feel. We need to build our trading skills one at a time when we are sure we can cut our losses we can move to execute, then we can work to hold on to profitable trades etc. Tennis stars do not become stars just through competition, they hone their skills one by one on the practice court and they continue to practice throughout their careers. As traders to identify the individual skills you need to develop and focus on them one by one. Someone new to tennis does not expect to go out and win games right away, they know they will have to spend a fair amount of time learning and practicing first. Short-term trading, like tennis, is skill based, and these skills can be identified, practiced and mastered.



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