To make it short - I probably should have never started trading. Over the last 12 years I have accumulated total net losses that exceed my annual salary by a multiple. And I could have actually used that money quite well. To help my partner, my family, to feel more confident, more independent, to have more flexibility to enjoy life.
I lived a relatively modest life, always focused on building wealth in the long term to be some day independent - free. And if it was not for my trading losses, I could have probably achieved that by now. But instead I not only lost massively, I also wasted an excessive amount of time trying to trade successfully. The fascination for markets I've had since childhood made me miss out on life.
I made every mistake you can think of. And I made I made every mistake again, and again, and again, and again. Since I Iost my first 10 K when Lehman defaulted, I was never up. My losses grew to 40K, then 70K, then shrank to 40 K, and over the last two years rose to around 400K. In my best six months period I made 30K. So even if I would have only such periods from now on, it would take me almost seven years to break even. No need to mention that this affected my life in all areas. Depression, chain smoking, neglecting physical fitness, it all impacts on-the-job performance as well. Social contacts - don't get me started.
What would have saved me, seems obvious: for one, setting strict loss limits, and adhering to them no matter what. Second, mentally preparing for losses. Having a clear plan what to do when you lose, like taking a break, waiting till you can be sure your head has cooled, and you're acting on the RIGHT emotions (intuition), not on the urge to mitigate your suffering. So why didn't I? More on that further below.
With my track record, I guess 99.999% of you would tell me to stop and never start again. And I've tried that. And succeeded for periods exceeding a year at times. I also succeeded trading only small amounts for months. As well as following low risk strategies for a year or so.
But positions suddenly moving against me, increasing market volatility, or also trades working out surprisingly well, all trigger "my other self" to take over - and suddenly I'm aggressively hunting for all the money I've lost - at times being extremely lucky and making nice short-term gains - just to loose them within a day, a few hours or even minutes.
I am writing this, after seeing a youtube video by Denise Shull, who states that neurological research indicates that the better you can express your emotions, the better you will be able to handle them. And I believe my story may be useful as a warning for some of you, and maybe give hold to others of you, who may be suffering from a similarly disastrous experience. Such can take you to some very dark places - and I believe I can assure you I've been there - and I always found happiness again after. Time heals all wounds. You can change NOW. And yes, it's not only the money - it's the shame as well, being a loser. In my case, maybe it would have been easier if I was not working professionally in the investment industry, mostly in risk management, to complete the irony. I have a masters degree in finance with specialization in capital market research, am a certified financial risk manager, and a chartered alternative investment analyst. I've worked in the industry 15 years, been following markets for more than 30 years and have a Bloomberg screen in front of me for 40 hours a week. So if there's a loser of losers, the worst loser ever - it's most likely me and not you, so cheer up.
But obviously I cannot tell you how to improve - if you're like me, then there's nothing I can say that has proven to work. There's a monster inside me, that keeps me coming back. I would name this monster "Hope". All you have to do is start with a thousand, double your capital 10 times (to 2, 4, 8...), and you're a millionaire, right? And how easy is it to double one's capital. We all can make 200 out of 100 within hours at some point (we may have lost a few thousands the hours before though).
Finally back to above question: why did I not adhere to my limits and plans. I wish I knew. Maybe resisting urges is harder for some of us than it is for others - like those who have longer legs are likely to run faster - ceteris paribus. What do you think?
I'm trying a new approach now. I changed my target: full focus is now on not losing more than 500 the coming week. As J Powell would phrase it: I'm not even thinking about thinking about thinking about profits.