Thanks Tom for the insightful comments and for sharing the information in this post.
I'm slowly learning to trade in a way that reflects my purpose and "style" which I consider one of the most important things we need to discover. I completely agree that price action makes it "obvious" what to do, as long as we stay calm and size our positions in a way that enables us to sleep at night and "ETR".
I was fascinated to see your equity curve do something similar to mine in the middle of 2023 but holding on to our systems based methods has paid off as we approached the end of the year. I did commit the classic and so stupid "averaging down" trading error as the stock market went against me in October but was lucky enough to recover from that with a net gain (less than yours but still a vast improvement on my early years). Those were rides I did NOT enjoy as you can see below. I won't use the numbers for privacy reasons, but here are the broad outcomes over my journey:
Years ended March:
2015 - Loss
2016 - Loss
2017 - Breakeven
2018 - Loss
2019 - Breakeven
2020 - Profit
2021 - Loss
2022 - Loss
2023 - Profit
2024 (to date) Profit
Its a miracle that I have not given up and I am determined not to, but do regret that I wasted so much time system swapping, trading emotionally and trading short timeframes in the expectation that the market would somehow make me rich any time I felt the need!
You might look at this record and say - give up Trevor, you are just too slow a learner - but something has resonated with me in your writing. I’m determined to stay the course, trade with purpose and enjoy the ride rather than dread the panic. I don’t know why I needed to learn the “never average down a losing trade” lesson again this year, but it’s part of the process I guess. If anyone else has almost 10 years of trading history and is only just seeing the light at the end of the tunnel like me - be encouraged. It was never expected to be easy. But at last it’s becoming fun.
I like your approach, Tom. I think we are on the same page.
My moto is "Nobody can predict what politicians, markets, technology, interest rates or stock and options markets will do. All we can do is trade."
While I watch trends and follow predictions, I trade based on risk, valuation and my understanding of a company's business and business opportunities. Having read Brian Nelson's Value Trap and other books and followed markets as an investor and journalist/blogger for more than 60 years, I believe PE ratios and historic metrics are noise, not predictors or leading indicators of anything.
After you've traded for a few years and you have paid the market tuition for teaching you about markets, you get a feel for markets and the kind of trading that works for you.
We don't have to be engineers or geniuses to make money. We have to be life long readers and students who learn by doing and adjust our tactics and strategies as market conditions change and as our financial and personal situations change.
Nobody manages my money like I do because everyone else has various conflicts of interest when it comes to grandstanding on CNBC or promising to manage your money.
Successful investing requires learning and as much time and work as you want to put into it.
For some, investing and trading is a job and game that you can play for money and rig the results by using good stock picking and risk management discipline. For others, trading is a side hustle, and everyone needs a side hustle that they can turn into a business when they retire or lose their jobs.
And then there are those who treat trading as a hobby. Often, hobbies become full time jobs.
Love your thoughts. Merry Christmas, Donald!
Happy Christmas!
Thanks Tom for the insightful comments and for sharing the information in this post.
I'm slowly learning to trade in a way that reflects my purpose and "style" which I consider one of the most important things we need to discover. I completely agree that price action makes it "obvious" what to do, as long as we stay calm and size our positions in a way that enables us to sleep at night and "ETR".
I was fascinated to see your equity curve do something similar to mine in the middle of 2023 but holding on to our systems based methods has paid off as we approached the end of the year. I did commit the classic and so stupid "averaging down" trading error as the stock market went against me in October but was lucky enough to recover from that with a net gain (less than yours but still a vast improvement on my early years). Those were rides I did NOT enjoy as you can see below. I won't use the numbers for privacy reasons, but here are the broad outcomes over my journey:
Years ended March:
2015 - Loss
2016 - Loss
2017 - Breakeven
2018 - Loss
2019 - Breakeven
2020 - Profit
2021 - Loss
2022 - Loss
2023 - Profit
2024 (to date) Profit
Its a miracle that I have not given up and I am determined not to, but do regret that I wasted so much time system swapping, trading emotionally and trading short timeframes in the expectation that the market would somehow make me rich any time I felt the need!
You might look at this record and say - give up Trevor, you are just too slow a learner - but something has resonated with me in your writing. I’m determined to stay the course, trade with purpose and enjoy the ride rather than dread the panic. I don’t know why I needed to learn the “never average down a losing trade” lesson again this year, but it’s part of the process I guess. If anyone else has almost 10 years of trading history and is only just seeing the light at the end of the tunnel like me - be encouraged. It was never expected to be easy. But at last it’s becoming fun.
Great writing. I am working on new position sizing regimes and I will use your books to do it. Merry Christmas Tom!
Thanks Tom !! Great article !
Thank you for sharing! I found the "The All Weather Trader" in Storytel and I am starting it tomorrow. Merry Christmas!
Great read.
Merry Christmas to you. Thank you for your insights.
Thanks for sharing. What a legend
Hope you like the book. A work of love for me with lots of reminiscing. ETR!
I like your approach, Tom. I think we are on the same page.
My moto is "Nobody can predict what politicians, markets, technology, interest rates or stock and options markets will do. All we can do is trade."
While I watch trends and follow predictions, I trade based on risk, valuation and my understanding of a company's business and business opportunities. Having read Brian Nelson's Value Trap and other books and followed markets as an investor and journalist/blogger for more than 60 years, I believe PE ratios and historic metrics are noise, not predictors or leading indicators of anything.
After you've traded for a few years and you have paid the market tuition for teaching you about markets, you get a feel for markets and the kind of trading that works for you.
We don't have to be engineers or geniuses to make money. We have to be life long readers and students who learn by doing and adjust our tactics and strategies as market conditions change and as our financial and personal situations change.
Nobody manages my money like I do because everyone else has various conflicts of interest when it comes to grandstanding on CNBC or promising to manage your money.
Successful investing requires learning and as much time and work as you want to put into it.
For some, investing and trading is a job and game that you can play for money and rig the results by using good stock picking and risk management discipline. For others, trading is a side hustle, and everyone needs a side hustle that they can turn into a business when they retire or lose their jobs.
And then there are those who treat trading as a hobby. Often, hobbies become full time jobs.