Tuesday, June 16, 2009

Throwing in the Towel

If you've got 10 minutes to devote to reading this update please take the time to do so.

Today marks the occurrence i've been fearing for the past six months. It ended today. I promised my parents when they offered up capital to get me above margin requirements back in January that I wouldn't put their capital at risk. Over the past six months i've gradually drawn down my accounts in a slow and steady fashion. Today after taking another loss in the NQ I called it quits. I canceled my real time data feeds for the CME and withdrew my parents deposit from the account to hand back to them with a "Sorry, and thank you".

I'm planning on keeping my account with tradestation open and pay the 99/mo for the platform and use their free forex data. Starting next week i'll be going back to my old job working at a country club as an opportunity to make some cash. I will still trade forex on an experimental and small (i.e. my 100.00 account) basis in the mornings during the weekdays and work afternoons and evenings at the country club.

My sister is getting married in August and I don't want to go out and look for a "real" job knowing that I would have to ask for two weeks off days after taking a position with a new company. Furthermore, the country club offers a unique networking opportunity to bounce career ideas off of successful people in different industries and in some cases line up job offerings. In fact, I got my job at TD Ameritrade a couple years back as a direct result of cleaning the golf clubs of the former CFO. Its a deadend job but it pays well and will give me a little bit of income, sun, social interaction, and networking that's probably been overdue for sometime now. Furthermore, I need some time to plan out my next moves.

Let me make this very clear right here and now. While defeated, I am NOT giving up on this dream. I know its possible to make money in the markets. I've seen people do it. I've traded with some of the very people that follow this blog and seen them do incredible things with their equity curves. And to some extent i've had a taste of success personally. For myself, I have to simply rationalize the last four years of my life devoted this career as finding 10,000 ways how not to make money in the markets. However, i'm still in search of that one way that will make money.

As far as possible interim career choices for me i'm really at a loss for pursuing anything in finance. While I have a degree in finance, investments, and banking every job opening in the field where I live is for "Financial Advisers" which to me is basically a fancy way of dressing up a used car salesman and giving him life insurance and crappy mutual funds to shove down the throats of others rather than kicking the tires on a used Chevy. Not for me. I've seen what these people have done for my parents - which is why I fired all of them. So that's out. I'm actually thinking maybe about some kind of pharma rep. Something that i'm not stuck in a cubicle all day and I can get out and interact with people.

If you all have any ideas or recommendations for potential jobs to pursue please let me know!

So how does trading tie into this plan? Great question. The first thing I have to come to terms with right now is that any 9-5 will kill my ability to trade as I know it. At best it would be scaled back to Forex markets after hours and that's not really a prime time as far as i'm concerned. Here are the other ideas i'm considering after I get capital re-established.

The other idea i'm considering is to start back swing trading equities. Back in the day I used a service called ChannelingStocks.com. The idea being they gave you a list of stocks each week that basically would just ping back and forth between support and resistance levels. Now back when I traded with these picks I didn't know how to spot reversals and confirmed bottoms. I knew even less about risk:reward, momentum, and stop placement. The big thing they always said on the site was make sure to wait for the stock to reverse. Back then I had no idea what this really meant.

So today I took a look at a couple of their more recent picks from the last month and pulling up a daily chart of the three symbols yielded very easy entry methods by either 1) Waiting for a "Scalper" alert to confirm the bottom or 2) waiting for a fast HMA to cross over. Basically stupid stuff that if you stayed with the trade until the HMA flipped yielded some nice gains over a month period. And it wouldn't require me to do anything more than check charts once a night. Furthermore, there are lots of automated pattern scanning websites available out there for free so the idea of just looking for trades like this on a swing basis kind of appeals to me.

The other idea is to start up with Bright Trading and some of their "Pairs Trading" courses. I have a friend who has been trading with them for almost a year now and as far as I know hes been making consistent money every week since he started with them. But the course is pricey and Bright requires you have your Series 7 to join.

Here comes the most important part of this post. Thank you to all of you who read it weekly and commented over the past six months. Its been an emotional roller coaster for me and without the feedback you all have given me I probably wouldn't have lasted as long as I did. I wish you all the best and luck in your current and future endeavors.

The blog will stay alive and I wish to continue documenting my trial and error attempts at becoming a professional trader.

In truth its actually a bit of a relief. I can't tell you the last time I stepped foot in a mall, went out for a beer with friends, or enjoyed a movie. I have spent the past years avoiding all unnecessary expense and living like a monk in hopes of figuring this out. But it became a Catch 22. I would go treat myself to a movie, or a night out with friends as soon as I got profitable. But it never happened. All that did happen was me spending even more time in front of the charts and me missing out on the more important things in life outside of the screens. So this break is a needed one - if not simply for a mental rejuvenation and a way to find more balance in my life. Success in one area shouldn't mean utter failure in another and unfortunately i've let that become my life.

So the moral of the story is this: Thank you for watching. I'm only sorry I couldn't provide more insight into the markets and profitable ideas to apply in your own trading. I've not failed at this but merely found way too many ways that didn't work.

Down but not out.

Cheers folks,

- Matt


daytrader233 said...

Good luck with whatever path you choose.

Michael said...

Damn Matt... I hate to hear that. Switching over to swing trading isn't a bad idea. There's plenty of time to make your comeback to futures trading.

Good luck Matt!

mtcx2009 said...

I can understand the relief you feel, I have been there. If it truly is your passion, it will always be there and you can always keep at it on your terms. I have done the best (live) while swing trading. If you actually had any or all of your parents money to give back, your a success in my book. Many people would have blown through it all.

Onward and upward.

Syed Omar (Hilmy) said...

i'm pretty much in the same boat as you. I've been trading the forex market for close to 3 years. If at the end of this year I am not profitable, then i'm calling it quits. Sometimes we may need to say no to somethign so other doors of opportunities may open up.

austinp said...

Hey Omaha :)

When I was 23yrs old, still lived the Budweiser University post-graduate plan. Had no real career path, no guidance, no structure.

Met a girl, settled down, married the woman, got divorced, moved on.

Worked some jobs, built a couple of small businesses, went to work with an option-trade advisory service, moved from NYS to Denver, moved back here and went off on my own. Traded index options, emini futures, bond futures, FX, ER2, ES, TF.

Spreads, long options, short options, swing trades, day trades, winning trades, etc. Blew out a few times, made a few small fortunes, learned how to smooth the ride.


You cannot quit because you haven't even almost started to live your life yet. You are merely setting aside furthering your trader career for awhile. Maybe quite awhile. Maybe a decade. And you'll still be very young, still ahead of where I was and many others were respectively.

I took my first few commodity trades in 1989 at 23yrs old myself. It was some ten years later before I took my next trades. Followed the markets at arm's length vicariously. In that interim time the internet was conceived and built out around the world. Makes me feel old.

The markets will still be around in some form or fashion when you're ready for them again. Some of us old war horses will keep the seat warm for ya, meanwhile.

Go live your life. Have some fun. Socialize. Meet some interesting people. Find a career path, and take it. And have some fun. Did I mention that already?

Just do it!

Best Wishes Always

TST said...


You are still young. You can have a full time career and treat trading as a 'hobby'. I would suggest that you trading ETF ( a basket of stocks that moved like index ) that will not require you to sit in-front of screen. I think that is the best form of trading to you at the moment. (I have tried induvidual stocks, that was sucked. ETF is better). However ETF require bull market to make gains. Before this, I can sense you are quitting Matt, but I know that you will be back, sooner or later. HASTA LA VISTA. Take Care.

E-Mini Player said...

A break from trading is not such a bad thing. I took a 4 year break from trading before I gave it a shot again, and it was much better this time around.

Lets chat over the weekend!

GulzaarFX said...

Dear Matt:
I am very sorry to hear you have to stop trading for the time being. I looked forward to following you on your journey to trading independence. However, from what I have followed on your blog, I am sure that you will be successful in anything and everything that you do. One of the folks who commented suggested that you trade as a hobby - an excellent idea - try swing trading or position trading in your spare time, as it requires less screen time and is ultimately more profitable. I wish you the best of luck.

Anonymous said...

Very best of luck to you Matt!!
And thanks for all your useful insights.

Anonymous said...

Hey dude - I follow your blow from here in Italy, and I'm very sorry to hear that you're leaving temporarily, but I don't think it's a bad thing - you just need some time to earn some trading capital back, re-evaluate, meet some new people. You're still young enough that you've got time to make this work out for you.
All the best.

Stan said...

Matt -

Like Austin suggested, you still have a lot of life to live and there is plenty of time to get it all figured out. I too had to take a break from trading in my early 20's when I was still in college and expecting my first kid. My objective moved from trading the markets to finding a job that could pay the bills on a consistent basis. However I always tried to move in a direction that could eventually put me back in the game. In part, that direction can simply be a career that will pad your bank account so you can get back to trading at some point in the future. For me, this lead to investment banking then a few start-ups and now finally enough capital and time to get back into the markets.

Life moves in cycles. Keep your eye on the prize, follow your passions and simply be patient.

Going back to the CC is not a bad idea and I think your attitude about networking to find a good opportunity is right on.

Blaze your own path. There are many different ways to get to the same destination and there is much to gain by taking the road less traveled.

Which ever direction you choose to go, best of luck. We'll all save your seat while you temporarily step away.



Charlie G. said...

I'm going to have to have this reality check moment soon TOO if my trading doesn't progress.

My issue is a little more about the clock running out versus eating through capital. At 39 with a couple little kids, I have no choice to continue working full time as I learn to trade.

Only trading for six months, I have come a long way but at some point I have to make a decision about the opportunity costs of continuing to struggle through a big learning curve, versus realizing that I may be reaching the limits of my intellect, mental processing power, and emotional balance - and not have enough to be able to excel as a trader.

I'm jealous as you have a lot of experience under your belt already (way more than me) but you have a lifetime to travel the world, try a couple careers, gain-lose-gain again a fortune from trading, and where-ever else life takes you.

Sounds like you made the right decision for the summer of the 23rd year of your life!

I wasn't done with college even yet then as I was on the 6 year plan and spent much of the summer drunk on a balcony of a sublet apartment.


Anonymous said...

Matt, just a question... If you're trading a small Forex account, why pay the monthly TradeStation fee? What has TradeStation to offer to you that the other free platforms (MetaTrader or any other proprietary platform) do not have?

Matt said...

Its a good question and the answer so far is... tick charting and .eld support.

But I started looking at Open E Cry today. Their platform has .eld support, free data, no platform fees, the offer mini-fx accounts with 250.00 minimums and good leverage. So i'm just going to check and see if they can provide tick charts and go from there.

I'd love to cut out TS and a monthly 100 buck fee. Its a bit outrageous.

Jules said...
This comment has been removed by the author.
Anonymous said...

Hi Your passion is leading you the path-connect with like mind-i been a trader for years- get on Stockwtits with briiliant minds IQ's beyond mind merged with my years of trading is what put it together-this is the most challenging business there is and you must treat is as such-simply keep a daily journal similar to the blog and honest insight into where you're at then tweaking it becomes easy- i cant stress the importance of connecting with serious pros.

I was curious of your role at TD I have been with them since 1992 and the brokers are very well versed with my strategies that sometimes I get confused with nuances of.

It is best to lose first so you know later as you grow and gain experience that that foe wasn't the market it was ourselves.

Rookies blame the market when it doesn't even know we exist.

I dont like giving advice but this helped me and other old timers will agree- develop a simple plan. stick to it. Never second guess during the midst of a trade what you should have done manage the trade.

Lastly self-knowledge is more powerful than any trading system.

I hear people under 30 speak of all the magic in this and that platform with so many technical indicator lines applied over a price chart that it begins to look like a laser light show at a Euro techno Trance concert.

I highly suggest that anyone here or anywhere visit this lady Denise Shull at her site www.traderpsyches.com so you can cut those ten years it took me to drop all the many multitudes of statistical advanced trading methods available and confront the biggest foe ever created that can destroy a person- his ego.

Watch the movie " Revolver" it is a marvelous study in the masterful con game inside our mind. Hidden from us so artfully.

MY impression is people under 30 rely on systems because they miss a vital fact we are trading against real human beings who know all that technical crap. They are bigger more well financed and know what we are looking at leading us down the path to destruction. The market can only perpetuate itself by acting perversely against the reality we think we see- it creates reality so you have to be on that side doing the same to win.

I knew these things Denise teaches but never applied them to trading- well entirely because i do in my personal life- again it is about adapting- we need to communicate with others this is why you shall succeed.

Jules said...

Hi Matt, I've removed my comment. After having a few hours to think about it, I decided you don't need negative reinforcements.
Just focus on getting what you want. You're young, but life is short. Just go where your heart leads you and live a full life. You can be a house painter and still be a happy person once you've sought out what truly matters to you.

Market Monkey said...

"I have spent the past years avoiding all unnecessary expense and living like a monk in hopes of figuring this out. But it became a Catch 22. I would go treat myself to a movie, or a night out with friends as soon as I got profitable. But it never happened. All that did happen was me spending even more time in front of the charts and me missing out on the more important things in life outside of the screens."

Sounds very similar :)

The fact that you've realized this and you're now working to balance things out, not to mention sticking to the plan and not losing your parent's money, shows real maturity.

The dream of trading for a living can be all-consuming. Ironically, taking a step or three back can help you see where you need to go that much easier.

Good luck.