Adventures of a Trader
While working for IBM and living in hotel suites, I had been reading many books on day trading. And since I have a degree in computer science, I even started programming my own indicators and systems. I ran hundreds of backtests, and I felt good about the results.
Now that I don't have a job any more that distracts me from trading, I can focus 100% of my time watching the markets. No more "missed trades" because of meetings or other obligations!
I decide to trade futures, since I like the idea of leverage. I read somewhere that futures markets are the "ultimate market" when it comes to trading. I open an account with $10,000. I want to see if I can double this account, or at least make a few thousand dollars in profits. "If I can grow a $10,000 account into $12,000... or maybe $15,000... or even double it, then I can just trade more contracts and I should be able to make a living trading", I thought.
I started trading the system that I developed an thoroughly backtested, and lost money. Not a whole lot, though. I had a few winning trades, but then I experienced some losing trades. After a few weeks of trading, I had more losing days than winning days, and my account suffered a 40% drawdown.
I was subscribed to several email lists, and every day I received another email announcing "a profitable trading system."
You know what they say? - "If a woman has a bad day, she buys new shoes. If a trader has a bad day, he buys a new system."
And sure enough: I bought! I can't remember whether it was a system or a course, but I read the whole thing in a few hours.
And it all made sense. I saw the beautiful equity curves that the system generated. THIS would help me to get my account back to $10,000 - and then some. And sure enough: Over the next few days I had several winning trades, and my account started to grow.
Then I started to experience a few losses in a row. "No big deal.", I thought, "Losses are part of the trading business. No equity curve goes straight up. That's why every performance report shows a max drawdown."
But before long, I hit the maximum drawdown, and my account was down to $2,000. My broker disabled the account and told me I need to wire more money before he let's me start trading again.
"If a trader has a bad day..." - you can probably guess what happened next, right? I bought more courses, systems and strategies. I spent a lot of time, money and effort on finding a profitable trading strategy, but my account doesn't grow. I'm going one step forward and two steps back. And the clock is ticking. I'm now already four months into my year-long experiment to find out if I can make it as a trader. Only 8 months left...
I'm in a downward spiral: My trading account doesn't grow. In fact, several times I had to wire more money into my account. And I keep buying trading courses, systems and strategies. I'm getting to the point where I'm running out of money! I can't afford to spend ALL my money on education, since I still need some money in my trading account!
To date I don't even know how much I spent on trading stuff that didn't help me at all. I'm an addict: I don't want to admit that I'm failing. After all, I'm a smart guy and I don't mind working hard! I'm committed to do whatever needs to be done to make this work. I don't want to go back and work "for the man!" I want to be my own boss, and I'm dreaming of financial independence. I'm dreaming of living in a big house at the lake, with a nice pool, being able to afford the toys that I want, e.g. a Harley Davidson, and enjoying life!
Little do I know that all this will come true in only a few years, and that the answer is staring me in the face!
Because right now I'm too busy buying more strategies, courses and systems. I am a sucker: I fall for all these promises of trading riches, and keep wasting time and money...