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Thinking out loud: Trading is Gambling in disguise, Loving the process, etc...
nearing the 4 year mark of trading and doing some deep evaluation. I had no idea getting into this venture the level of self discovery that was to come...the emotional tests are above and beyond anything i have experienced. the height of excitement (borderline mania) having a +$100k day...to the depths of despair after losing nearly everything and feeling like a complete and worthless failure like I didn't think possible.
I truly did not think I was gambling, had no interest in thinking in probabilities, and just thought i could will success into existence. After a huge hit I would take a break and read some more books, take some notes from some online courses, then come back with fresh ideas only for the cycle to repeat itself.
"You must love the process" is repeated over and over again for success in a field. I would argue that you dont necessarily have to love it (although it would help), but you do have to be willing to do it. and by "do it" i mean work your butt off. I though trading would be easy money...6 months of figuring it out then the millions would just start rolling in lol. supreme naivety.
So this is where I am at now...Success in trading takes way more work than people think. Way more. It is the highest paying job in the world...how silly it was for me to not even consider the level of competition i was facing. Its akin to thinking I could get off the couch and walk onto the starting lineup in the NBA lol.
A HIGH LEVEL OF SUCCESS IN ANYTHING REQUIRES SUPREME DEVOTION...EASY IS NOT AN OPTION.
- I feel overwhelmed by the amount of dedication and effort required to actually make this work. I am afraid that i just do not love the process enough to devote my life to it. But also cannot bring myself to quit. I do have a general interest in the markets and always have but I just don't know what to do.
- Coming to grips with the fact that I have spent 4 years becoming a professional gambler feels foreign or not real to me. IDK how to feel about this. I hate casinos because i am aware of the house edge...slot machines are not entertaining to me in the slightest. I understand that our job as traders is to essentially shift the probabilities into our favor with some sort of edge. It took me way to long to understand that.
IDK sorry to ramble just wanting to organize some thoughts into print. feel free to offer any advice you think would be helpful.
The following 5 users say Thank You to Kefkas Laugh for this post:
I enjoyed reading your post and it brings up lots of thoughts as well as emotions that I have experienced.
Have you really had a 100k day personally? Because even though lately a 10 lot can do that in a day it is still very difficult unless a stroke of luck. I'm not asking because I'm impressed. I ask because you seem so focused on big money that perhaps you have let that cloud your process?
Trading also is far from the highest paying job in the world. Perhaps if you managed a fund but then you would hire the traders who make less than you. Trading is grunt work at times and the key point is at times and also grunting!
The money isn't money to me. Putting value on anything is difficult when successfully trading. It skews everything imo. I just like take money from the market. Like a real human friend sometimes the mkt is good to me and sometimes it pisses me off. It will never be easy. Imagine having a billionaire friend. Do you expect him to just hand you money? Or make you work for him to earn it. Working is time consuming and grunt work.
Daytrading is repetitive and even when trading well exhausting at times but fun.
Are you day trading swing trading etc?
If not making money with edge then it is guessing everytime and being a good guesser can make you money in short runs.
Why not set goals much lower say 300 avg per day per month?
6k a month. Then do that for 3 months. Then size up to 500 a day per month etc.
That's still good money for doing what you love. Maybe you don't have the passion right now. It ebbs n flows... For sure. Energy and enthusiasm and confidence are all necessary to stay dedicated to your cause. But if you keep shooting for the moon and fall short over and over then you might just get frustrated and quit! I need liquidity from other traders. That does not mean I want you to lose! I want more small winners who are happy trading for a living and making 50 to 250k a year. That's the sweet spot imo. If you could do that I'm sure you would be pretty happy.
Set sights lower. Stress reduces and you get positive reinforcement from hitting your smaller goals. Don't rush the process... Ever.
Good luck and keep trading if you love it but if not then quit. Otherwise it sounds like a possible addiction
The following 7 users say Thank You to HiLatencyTRDR HLT for this post:
yea i've really had a $100k day and a handful of 30-50k days...paying attention/trusting my gut and being short during the Covid crash for example paid me well. but nearly always my greed got the better of me and I failed to book profits. My bet sizing was absurd, risked way more than most are willing, etc... And yes, being clouded by those big wins is an issue. real actual trading feels tedious and boring by comparison, this is evidence that I am a gambler and not trading for the right reasons.
I get what you are saying here...but the potential/possible amount of money you can get from trading is practically limitless. I was speaking in terms of potential payments, not typical.
Yea i agree with everything here. MY progression as a trader has basically been: day trade typical FAANG type stuff -> penny stocks (I would short pennies that were pumped hard), options (outright positions, longer hold times from 1w - several months) -> currently day trading 1-3 lot micro futures employing edges I have developed.
I have been doing everything right, tracking performance metrics, actually following my rules and making slow slow progress. And just one day I stopped, about 2 weeks ago and i havn't traded at all since.
All Good advice, thank you.
The following 2 users say Thank You to Kefkas Laugh for this post:
You mentioned you do not know how to feel about this. I will tell you, feel good about it and relaxed about it. NOW, you know what you are doing.
You nailed it, you are a professional trader who trades discretionary and take your best guess for a profit per trade. That is what us manual traders are, we gambling traders doing the best we can to make profit consistently year to year. It is hard? Yes, it is. Can it get easier? Yes, once you make the declaration that you are a guessing/take-your-best-shot/discretionary/gambling trader and live with it.
You have to know that year to year all your best guesses will work out. Be a gambling trader and live with it. Just do not blow all your money away.
If you want a complete concrete edge in this trading business start researching about algorithm trading systems where you program trading ideas and back test for up to 20 years of market data if your trading idea makes money or not. Then you can prove to yourself you have an empirical edge with data. Then trade that.
So, you got 2 choices
1. Be a gambling discretionary manual trader and hope you have edge year to year with your own skills.
2. Be a algorithm trading systems trader with Edge defined before trading.
Choice 1 or/and 2 is perfectly fine.
Nice and easy.
The following 2 users say Thank You to goodoboy for this post:
I think it was John Coates that said, " Gamblers are willing losers who occasionally win; speculators are willing winners who occasionally lose."
That is, a gambler, consciously or not, willingly plays a game he knows is stacked against him. So at some level he is willing to lose his stake. His rewards for doing so are non-monetary. Specs are more mercenary. They do not play a game where they don't have a reasonable positive expectation before they place the bet. They play to win, but sometimes pay the price of risk.
The following 13 users say Thank You to tigertrader for this post:
I think its just a matter of semantics...Is the casino itself not also gambling with its money even though it has the house edge? some say no, I say yes.
The following user says Thank You to Kefkas Laugh for this post:
Not to be accused of being Anti-Semantic; but there is a difference, and it’s not a very subtle one. The aforementioned house edge for starters, not to mention the free cocktails!
The following 3 users say Thank You to tigertrader for this post:
I like simplicity, and trading (in the typical, probabilistic edge sort of way) is simply placing a bet on an uncertain outcome. there is no reason to cloud the definition further. We are gamblers.
The following user says Thank You to Kefkas Laugh for this post:
That's what makes markets. We all see the same thing, but no two minds are alike, so we all see things differently. If we didn't, then we wouldn't have markets.
The following 5 users say Thank You to tigertrader for this post:
