The chronicles of my trading journey…..
Trading is a tough business and there is no doubt about it. Statistics show that around 90 percent of the traders lose more than 70% of their account in the first three months. And 63% of the people quit trading during the very first year. So far so good. But how much time it takes to become a consistently profitable trader? This is the question that I have been receiving from the people around me from the first day of declaring myself as a profitable trader. Unfortunately, there is no single answer to that question. Some reach that stage in a few months and some in a few years. For me, it has taken around one and half years from day one to understand this business. I actually lost all my faith in trading and then I came across ytc, which has shown that there is some space for me in the market. I have blown up my account thrice during that learning curve and the loss was huge ( I don’t like to bring numbers here). I don’t like to transfer that blame to lack of guidance and stuff, I was completely responsible for every penny I lost. I was too emotional and I used to call myself as a risk-taker under the name of trading. What a fool I was!! 😀
Enough with the guilty past. My experience in trading is very limited (4 years as of now), and I don’t know whether each and every trader goes through the same rough patch or not. But I can say this with confidence, trading is much about self-realization, self-improvement and the methodology comes next. You must be totally aware of your personality to become a successful trader. If you aspire to be a trader, add this at the top of your to-do list. You will be the same guy as yesterday if you don’t improve yourself. Make a habit of learning and improving yourself every day. Let me narrate how I ended up as a trader I am today first and we will look into these questions at the end of the article.
Me as a Gambler :-
I used to have a solid adrenaline rush while I was doing my graduation. I used to gamble on every damn sport those days(of course, I never made money) and approached financial markets with the same mindset. On the first day of my trading, I didn’t know anyhow and why about markets. I just knew that stocks move up and down and there is a chance to gamble to make money. Also, I used to think, unlike other betting games, we will be provided with margins if we day trade and that helps in earning huge chunks. I started my trading with Rs. 30,000 and lost Rs.10,000 in the first week. I didn’t have a plan and I actually didn’t even know that there is something called shorting. I gambled in markets for about 2 months without giving a thought to analysis and stuff. Guess what, I made huge profits with beginners luck. My account doubled and in the next 5 days, I have lost everything, including my initial investment. I didn’t have a single extra penny other than this. This loss motivated me to take a halt and to dig a bit deeper into the analysis part of the trading arena.
Me as a Technical analyst:-
I bought two books, one is Edward and Maggee’s and the other one is by John Murphy. Both of these books talk about classical technical analysis. I was a slow reader then and it had taken around 6 months to complete these two books. After completion of the two books, I realized that almost the two books talk about the same thing. I traded daily charts with my newly learnt knowledge of technical analysis. I was benefited from daily charts as there was no margin and that decreased the risk substantially. I was not profitable, but this cycle made me realize that trading is a professional gamble and there is no room for the average and below-average performers. If I want to be successful in trading, I must be head and shoulders above all. This is what I have learnt.
Me as a Mechanical trader :-
I was not profitable just with some trendline and moving average analysis. I then entered into a chase behind mechanical trading systems. I tested around 18 different indicator based systems which showed outstanding backtesting results. None of them earned a single penny for me in real-time. Then I bought a book by Robert Miner and traded his Dual timeframe Momentum strategy, which is also indicator based. I actually fell in love with it and I added my technical analysis skills to this which made it a combination of mechanical and discretionary strategies. The results were positive, but they were not consistent. As the buy and sell signals are indicator based, it works on probabilities and we, retail traders cannot survive every day, if the income is decided on probabilities (in my opinion). I gave up on this after four consecutive negative months. I thought of giving up on trading as it seemed like a never-ending chase for me.
Me as a Price action trader:-
I stopped trading after the bad experience as a mechanical trader, but my learning curiosity for markets didn’t stop. I used to spend a lot of time reading the threads of traderji.com . Then I came across a thread by a user, Saint. The title of that thread was “Teach a man to fish”. What an explanation it has!! This guy made trading so simple with his stupendous explanations. This raised my curiosity on markets again and I successfully traded hourly charts of some stocks with this price action methodology. As my investment was less, the returns were also very small and that didn’t satisfy my hunger. But the good thing is, Saint proved me that trading can be done with simple analytical skills, Price action. I started searching for PA related books and forums and gathered as much knowledge as possible. I bought Al brooks course and it scared the hell out of me. This course complicated trading again(after investing F@#$ng Rs.10,000), in a new way, and I just stayed away from his books for some time. I found the value in his writings after I understand the rules of the game. 😀
After a rigorous search on price action trading, I came across yourtradingcoach.com, and Lance’s 6 volume series. I dumped everything I have learnt about trading until then and started to look at markets in a different way with the eyes given by YTC. Even this journey with ytc was not easy at the start, but it was fun. After a thorough exposure to charts, with the knowledge from YTC, I started enjoying trading. I gave up my chase behind profits as the fun and learning part has dominated that feeling for money. I traded around 8 months using ytc without earning a single rupee. I had blown up my account twice during those 8 months, but I learned a lot from those disasters. I was hurt emotionally, but YTC gave me hope for a better future. So, what happened after 8 months?? Keep reading. 😀
I used to fade all the weaknesses at the starting stages of my journey with YTC and I was doomed. Then, I started fading weaknesses against the future bias and the losses decreased, but I was not profitable yet. Then I started fading weaknesses in the direction of the future bias at the price levels given by the market with its past data. I started getting profits. With this knowledge learned from the post-market reviews, I build tactics and added my personal touch to YTC which you are already aware of this website.
I realized that trading is simple from the methodology per se, but I was not getting decent money. Hindsight charts displayed beautiful opportunities with the same methodology(ytc), but something was stopping me from identifying those opportunities in realtime and that is not in the outside world. It is inside me. This is where I started my journey towards self-realization.
My journey towards self realization:-
I never had the habit of reading books before. But this time, I decided to know myself and that was the starting point of my book addiction. 😀 The more books I read about self-help and spirituality, the more I addicted. I attended sessions of Art of living and some other locally organized programs. I gave up alcohol and other addictions, and actually tried to become vegetarian(but failed :D). I started working out (not to build muscles but to keep my body and mind under control) and started meditation. Unconsciously, everything I mentioned in one of my previous articles about the way trading changed my lifestyle happened. I started taking social responsibility of things around me. And my trading results started to blossom along with this. Everything was perfect till then.
Then I moved to my village with a thought of operating markets from home. It was good in the beginning, but I stopped working out. I lost control of my diet and I gained some weight. My meditation sessions are not good now. I lost control over the work-life balance and things started to turn worse in my personal life. Of course, trading results are still good, but I am missing some important aspects of life. So, decided to move my ass off my native place to start living again.
I guess this has given you a glimpse on how I evolved as a trader from a gambler. But now, let’s get back to the question I mentioned at the start of the article. How much time does it take to turn into a consistently profitable trader? Like I mentioned, trading is all about self-realization. To answer that question, let me name a few others from the same category of self-realization. Getting fit by working out, Leaning soccer ( or any other sport), turning into a spiritual human.
How much time it takes to lose fat and to get fit?
How much time it takes to learn soccer from the scratch?
How much time it takes to spiritually succeed and treat every living and non living being as one?
Now, how much time it takes to become consistently profitable in trading?
You cannot answer in numbers to the above questions. But few things are common in all of them. Discipline, Patience, Perseverance, Moving forward by learning from the pains and setbacks (incremental growth) and you name the remaining. You now have an answer.
Another great article!
I think I know how long it will take to become consistent.
Its the time it will take to break their old mental framework and install the new valid one.
For most breaking free of the old mental framework is nearly impossible, for some they are just unlucky they are stuck in indicator hell…. Or it’s equivalent. I stumbled on ytc only this year march and nifty nirvana a year ago… After stumbling on ytc everything is falling rapidly in its place!
In the meantime, I ‘ve been reading everything I can lay my hands on but nothing really translated abstract concepts into tradable chart lingo as ytc did! Am still a work in progress!
Good to know that you like YTC. True that it gives a deeper look into the markets, but we need to do a lot of effort to successfully make it into an actionable plan which is the reason why most of the people quit it n the middle. YTC gives explanations to almost all the moves of the market except few. These things happen gradually and you can proudly say that you are in the process of turning into a pro.
1) You will stop searching for indicators forever.
2) Bars and candlestick patterns become irrelevant to you as you will be in flow with continuous order flow.
3) You can trade and adjust tactics on any market if it gives enough liquidity.
4) Position of the stop will be your only concern. You don’t care whether the entry order is at candle high/low as you gonna time it when the feel for the market tells you to place the entry.
The best way to speed up the process is, take a hindsight chart with structural boundaries drawn on it, and try to read all the swings using YTC principles.
Awesome post. can’t thank you enough for taking time to write this post.. 🙂
I am still very early on the path to consistent profitability, but your post has given me hope that provided one is persistent and focused it can be achieved.
I have a question though on the given sentence from your post above:
“Then I started fading weaknesses in the direction of the future bias at the price levels given by the market with its past data. ”
I have given below, my understanding of the above lines, please correct me if I am wrong:
Let’s assume that the market is making HH and HLs in an uptrend. As Lance recently mentioned, the structural framework (Resistance and Support zones) would keep moving up as the old resistance zone would become a new support zone once the market breaks above it (I think this is what we would ideally expect to see, if the market is in a clean uptrend..)
So by your above statement, I can infer that once the market breaks the current resistance, provided that pullback is not strong but a gradual one (with smaller body-sized candles), we would enter on a limit order at the previous resistance level, with a view that this level should hold as per the current order flow? or would we wait for some bullish evidence at this level and then enter?
I don’t place blind orders like that, but Lance does with the help of Keltner channel envelope. He is good enough to know the signs of trade not working out and scratch the trade faster than me if in doubt and that puts him at an extra advantage. I always like to see the strength of the level before placing a limit order even though the move into the setup region is weak. If it doesn’t provide that, I am ok to enter with a stop order. I tried placing blind orders before and realized that they don’t site my psyche.