The only way to progress as a trader is to admit your mistakes and correct them. I've noticed a few more blogs (courtesy of Green All Over's blog list) that have deleted pages they wished they'd never published. You know the type of page I refer to; "The One Month Challenge", "Double My £100 Bank in 10 days", "Make £100,000 in One Year", "This Time Next Year Rodney..." etc. Pages are removed when the bankroll blows up or the website is never updated again.
Bold claims are usually made by young traders starting out with no real idea of how to trade. Well, I am going to start the ball rolling by admitting that I was such a trader, many years ago. I was working in The City and if I wasn't spread betting futures contracts, I was in the casino (after work) playing poker. Internet poker and Betfair had just taken off. I was the quintessential action gambler. All money, bluster and no idea of what I was doing. Money comes easy in The City and goes just as quickly.
When the first third-party software applications came out for the Betfair exchange I was onto it. Of course, the ladder has you "scalping" like a pit trader in a futures exchange but without a structured strategy losses mounted. Any idea I heard of I tried. Even if it failed I just blamed others and continued in the hope that I could make the markets bend to my will.
Then the best thing in my life happened, I was offered a redundancy and so I left The City. I haven't played poker since. I stopped futures trading. Rather futures stopped me when I took a £10,000 hit on an oil contract. I reevaluated my entire life and became more realistic in what I could achieve. I realised that wealth is a pyramid structure with a long hard climb to the top and there is not much room at the top, even if you get there. Try hard but not so hard that you guarantee failure.
Today, I get rich... slowly. If at all. I make a living. I am comfortable. I do not have a wealthy lifestyle. I am a member of a tennis club with plenty of fast cars parked outside. That is the lifestyle choice of other members not me. I am happy to drive a twenty year-old secondhand jeep that I maintain myself.
And so I offer my list of mistakes and ask you to do likewise on your blog and/or Twitter account. Retweet and get others to do likewise. Only by being realistic and truthful to yourself and towards others can you progress. It's the first step to success.
My mistakes...1) I thought only of winning and not a winning edge.2) I jumped at ideas and traded them without back testing.3) I had no money management strategy.4) I got caught up in the action rather than trading the numbers impassionately.5) I chased my losses instead of my winnings.5) I boasted about winnings and kept quiet about losses.
Today, I never trade with trading models that have not been thoroughly tested. I write ideas down on scraps of paper and when the day's trading is over I test those ideas to destruction. Most fail. You just have to accept that fact and move on. I never trade a losing model in the hope that it might work.
Money management is very important to me as I am self-employed. My sports trading is just a part of my income and I have to look after every penny I make. I am far closer to retirement than I am to my days at university. There can be no big mistakes from now on, just little ones to learn from.
I never tell people I know of what I do. If they ask then I just say, "I write and I work with computers." If they ask about my website, book or Twitter account then I just say, "If you are interested in that sort of thing then you will already be reading it." I used to make fun of a Chinese girlfriend who always told me to be "humble and modest" (it was the pronunciation that amused me - humbull and moh-dest) but she was right. Nobody likes a big head and P&L blogs are the worst kind of big-headedness if not written with a large dash of modesty. There are some good P&L blogs and they know who they are because I frequent them but most are egotistical "look at my latest win (whilst we brush the losses under the carpet)".
Action I find on a tennis court. If I have an off-day or just don't feel happy about life then I take it out on a tennis ball and not on the markets. As children we were all told to pick on someone our own size. We are all pygmies in the markets.
Update
Apparently, I am the only person in the world to have made trading mistakes. I never knew I had so much money to pay off all you winners!
Update
Apparently, I am the only person in the world to have made trading mistakes. I never knew I had so much money to pay off all you winners!
