It wasn’t a single day, it was more like a week of wondering if I should quit trading.
At the end of 2012, I focused on getting the most out of my trading system. It had performed well up to that point and after my annual trading review, I knew what I had to do to size it up. And that’s what I was trying to do.
Trade the same system just bigger. No major changes – just sizing up what I was already doing. It had worked for 4-5 years at this point – if it ain’t broke don’t fix it, right?
Midway through 2013, though, I was staring down the barrel of a major drawdown which for weeks I’d convinced myself was just temporary. It wasn’t. So, on one final day of particularly poor performing trades, I had to face the music and reduce my position size substantially.
I desperately examined my trading journal, looking at every single trade I took. Had I veered too far from my trading plan without realizing it? Was I losing out on significant profits to slippage with the increased position size I was taking? Some missed trades are unavoidable and out of your control, but was I missing out on a lot more than the previous year? In short, what were my avoidable mistakes? I was on a mission to find out.
I’d always been able to do this type of deep dive into my trading results and figure out what the problem was and address it, but this time there was no obvious path to fixing it.
If it wasn’t something that I was doing wrong, what could it be? My only conclusion after tossing and turning (literally losing sleep!) for several days was that my tried and true strategy had just… stopped working.
The Abyss
This was devastating to me. It’s hard for me to even write about this because of how difficult it was to grapple with. I had done all the recommended things to be a good trader. I started trading with small size, set reasonable goals for myself, and slowly sized up over time. I methodically logged all my trades in a journal at the end of each trading day. I regularly reviewed charts for my trades and looked for ways to improve.
That stable game plan had served me well for many years and turned into solid trading profits. I was a trader – and not only that: I had been a successful one. And now this was happening to me?!?
I knew there were no guarantees in the market and that it’s constantly changing and traders have to adapt. I thought I had the foundation I needed to adapt to anything.
I was out of ideas with no hope for my trading future. I hated this feeling of helplessness more than anything.
It wasn’t simply that I was in an ordinary drawdown; I was in a drawdown of working solutions – a trading malaise, so to speak – completely out of ideas for how to improve my strategy.
A Better Process for Creating Trading Systems
I spent the next several months building a trading process from the ground up to avoid this situation.
A backtest alone was not going to cut it.
A trading journal was not going to be enough.
All the discipline in the world doesn’t matter if you can’t adapt.
Strategies that work for other traders weren’t necessarily going to work for me.
I needed to devise my own unique trading strategies and nimbly recalibrate as the market is ever-changing.
And that’s exactly what I did.
I’ve spent years refining my process and reduced the amount of time it takes to create a viable trading strategy by 20-fold. I’ve used this process to create 15+ profitable, robust trading strategies and continuously improve them.
If you want mediocre trading results by taking orders from some Ferarri-driving trading guru, stop reading.
If you’re ready to say “screw the gurus” and rely solely on yourself for your trading success, then look no further than my free weekly email newsletter.
Every week I send one actionable tip that you can apply to your trading to create a process for continuous improvement.
Screw the Ferarri-driving trading gurus by signing up below.
