My name is Tim Grittani (kroyrunner89), and I've been a full-time daytrader since the beginning of 2012. I've learned a lot along the way from my successes and failures and would like to pass along some of these lessons. This blog will hopefully save me time in answering the dozens of questions I get each week through Facebook and Twitter. If not, I guess I just created more work.
Before I launch into my recap of November, let me take a moment to thank all of you that took the time to reach out to me with words of encouragement following my last post. I truly appreciate all of the support and suggestions!
We're going to go ahead and do a video recap! It just comes across way better than text in my opinion, but if anyone would prefer I go to written recaps let me know!
For the past several months, I've been suffering through the worst slump I have ever experienced since I started trading. You really could say that ever since my PBMD loss in late May, I haven't been the same. I let myself turn into a stubborn trader with an inflated ego, someone who cared more about making "enough" money than about trading well. I notice that many of my favorite setups still work well, but my ability to trade them has greatly deteriorated due to mental and emotional mistakes. It has been incredibly frustrating and humbling, and one day in October it led me to ask that dreaded question, "Am I sure I want to keep trading?"
99% of the time, I absolutely love trading. I love the challenge of it and the potential reward if you're performing at your best. That's why it was so surprising to me to find myself in that place emotionally, because I'd never been there before. I had to stop and evaluate why I had suddenly had been pushed over that edge, when I hadn't even felt that low back when I was first learning and struggling.
When I finally came up with the answer, it was actually pretty frightening. I felt that I had lost the ability to control myself and my emotions. I wasn't losing because I couldn't make sense of the markets. I wasn't losing because my favorite patterns stopped working. I was losing because of ego. I was losing because time and time again, I would watch a stock blow through my mental stop point without taking it off. I was losing because I couldn't even get myself to put in physical stop losses, as I vowed I would do. I was losing because I'd get frustrated by all of this and then play the next setup with ten times the size I'd played anything else recently. You can guess how that usually ended. I thought about quitting because I couldn't stand the thought of possibly throwing away everything I'd worked so hard for, especially due to what boiled down to a lack of discipline.
Of course, we're talking about my lowest moment here. The other 99% of me that loves trading won out with ease, because I still believe in myself and enjoy trading so much. But it was still uncomfortable to find myself asking that question, and it was even more uncomfortable realizing how hard changing these bad habits really is. For example, I've been talking about needing to cut losses better since my LAKE loss last year - and two six-figure losses later here I am still talking about it. This is exactly why so many traders fail. It's easy to figure out the changes you need to make, but so many of us lack the fortitude to follow through and actually make and sustain those changes.
I don't want to be another failing trader statistic. I don't want to become a story about someone who made it big and then threw it all away. So now I'm going to truly get serious about changing, rather than just jumping back into the market as if everything is "business as usual," like I normally do after a bad run. I read my first trading book ever, Momo Traders, and am currently working through my first trading psychology book, The Daily Trading Coach: 101 Lessons for Becoming Your Own Trading Psychologist. I've lowered my position sizes drastically, telling myself that I will now only risk $1000/trade, or $2000, if it is truly an exceptional setup. I have also identified the three most costly trading mistakes I make and will be meticulously tracking them and working to eliminate them.
FOMO (Entering a trade due to Fear of Missing Out, rather than waiting for my ideal setup)
Trading too large (Sizing in with more than my planned $1000/$2000 risk for various reasons)
Failure to cut losses (Continuing to hold a stock beyond my planned stop point)
Every month, if I make one of these mistakes and take a loss, I will enter it into my log. At the end of every month, I'm going to use this blog to help hold myself accountable. I will post an end-of-the-month recap and share all of my losing trades that broke these rules, with details. The goal will be to see improvement every month, as I, hopefully, slowly eliminate these mistakes from my trading. ONLY when I've seen significant improvement will I begin to consider sizing up again.
You can expect a post from me in early December, recapping my November trading. It has already been a wild ride as I lost discipline for about a week and a half and fell into some very frustrated/emotional trading. More on that later!
Over the past couple of years, I'm sure I've frustrated many of my readers who have asked me the question, "What trading books do you recommend?" I've simply never had an answer. Reading trading books never interested me. I had skimmed a couple, but for the most part, I felt like I would just be wasting my time. My thinking was that I would rather spend my time learning by watching the market than from outdated info in a book. Sure, reading the stories of billionaires on Wall Street could be interesting, but there was no way I could relate to that or use it to make myself a better trader. By the time I even knew trading psychology books existed (one of the only categories that I think could be useful), I was already quite successful and felt like I didn't need them.
In late 2014, Brady (@MiltonaTrades) and Nate (@InvestorsLive) approached me and asked if I would be interested in being one of ten traders featured in their upcoming trading book, Momo Traders. The book would be written in a question/answer interview style and explore the path each individual trader took to eventual success, as well as the many lessons they learned along the way. I loved the idea and agreed to be interviewed, which turned out to be one of the most intense interviews I have ever participated in. The Skype interview took almost three hours to complete, but left me feeling great about the quality of information I had shared, and I was incredibly excited to read the interviews of all of the other traders who had been featured. In my mind, I was (and still am) a small fish compared to some of these traders, who make millions of dollars per year. Like myself and everyone else, they had all started as beginners once, with much less money to their name, and I wanted to read about their journey and learn everything I could from them.
Now, a year later, Momo Tradershas finally been released. As I had hoped, the stories inside are absolutely incredible. When you see these traders posting screen shots of their massive profits now, they don't seem human. However, to read all of their stories, hear about their early struggles, and learn that they came from the same place that you did, is incredibly inspiring. No two stories or strategies are the same. So I would suggest that you really take your time while reading each chapter, maybe read just one or two chapters a day like I did.
Another big perk to Momo Traders is that a portion of the proceeds goes to charity! Not only are you investing in your education, you're contributing to a good cause! There is SO MUCH to learn from each one of these traders, so I highly recommend you pick up your copy on Amazon or at momotraders.com. It's a very inexpensive investment towards your education, and you can learn how these ten traders, who were once beginners too, became the millionaires they are today.