To cap or not to cap, that is the question.

Last time I spoke with you guys I talked about trading on tilt… that out of body numb frenzy that can leave you retching in the sink or crying on the floor.


Prior to that episode, I was thoroughly convinced I’d never experience that. I’d traded for over two years without blowing up an account. I thought I was IMMUNE. Ha.


Looking back, it’s almost as if I don’t remember being in my body the week I torched my account.


It wasn’t rational. It wasn’t even that emotional. It was just something beyond my control. I traded every wiggle of the market with size, and the daily losses far exceeded my biggest daily gains.


To be honest, I’ve been on a bad path since December when I was inadvertently thrown into some twitter drama I never saw coming. Until they are aimed at you, it’s impossible to know how deeply words can wound.


It felt like my world was upside down, and a community I loved so thoroughly turned on me. It may seem superficial to you, but living through that was the hardest thing I’ve had to live through since my dad tragically passed away 6 years ago. There were days I didn’t even get out of bed.


Looking back it’s so obvious I was heading for a big crash. I had more emotions than I could handle, and I looked to trading as a way to regulate them. If I was in a trade I was able to numb myself to everything and just focus on the trade. I learned that losing on a trade hurt less than living in reality. It somehow turned off my ability to close out a trade and walk away. At least being red was an excuse to feel pain and not just focus on the situation at hand.


In retrospect it all adds up, but at the time I had no clue. I’d been on a consistent winning streak and was focusing on a strategy that worked… until I stopped following the process.


Two weeks ago I went skiing in Steamboat with my family. It was the first true break I’d taken from trading in probably two years. I skied hard runs, I hot tubbed, I bloody married, and I hit the Apre scene hard.


I enjoyed life. 


I took a full break from the market.


Within 24 hours of returning from CO, I was on a plane to Austin for South by Southwest. I spent 3 days there, and was completely out of my element. I was with two friends but otherwise knew nobody. I was put way outside of my comfort zone and asked to speak publicly multiple times, which was intimidating. It was the first time in over two years I was completely out of my world and out of my head. 


During that trip it felt as if I was able to float above my own body and look at my life from a bird’s eye view. I hadn’t been able to see the forest for the trees on the ground, but from above I could see so clearly I wasn’t happy.


It dawned on me that when I don’t trade well I’m not well mentally. Now, I’m sure there are hundreds of you out there throwing flags on that play yelling that’s the wrong way to look at it… but it’s true. Trading well makes me happy. Trading poorly and sloppily makes me hate myself.  It’s like going out to a bar the night before a huge presentation. You know it’s wrong, but you do it anyway because you’re more interested in the present moment than your future. But we all know you wake up the next morning tired, sick, not at your sharpest – saying the worst things to yourself inside your head.


To take that analogy back to trading, I spent 10-12 hours a day for 2.5 years to learn how to trade… and I just WASN’T doing what I knew had to be done. I was taking shortcuts and letting all kinds of other shit/life obligations get in the way of something I knew I needed to do perfectly in order to feel my happiest. Why would I do that to myself? I convinced myself it was just where I was in my life and that I could keep all these balls in the air at once, but I was left feeling exhausted, overwhelmed and like a total failure everywhere I applied myself.


Instead of feeling confident in myself and in my trading, I went into each day expecting to lose, which was of course a self fulfilling prophecy.  The more I lost the more I had to fake being fine to my family and my work and my children. It was all too much.


After getting back from Austin, I had to ask myself honestly if I even wanted to trade anymore, or if it was something I should just let go. The extremely hard part of that was that I’d put so much time in, and last November when I was on my winning streak I said to my mom that after all this time I’d finally stepped into life as a trader and called myself a trader without feeling like an imposter. I felt like I was competent, and I felt like I was good. As time goes on I realize a good deal of confidence and a small touch of arrogance are absolutely essential to all traders, otherwise you don’t trust yourself and make mistakes.


I have never one time in my life failed at something I put 100% into, and walking away felt like not only an overwhelming defeat, but such a lost opportunity.


Of course I have wrestled over and over and over with if it’s even possible to make the kind of money I need to make in the market. If so many people fail, are there real life people that actually make it? Was I chasing an absolute pipe dream and throwing my life away for a mirage? I’m honestly still not sure, but I’m choosing to believe the type of life I want is possible and something I can achieve through trading. I don’t think I can get super rich or buy a sports car, but I do think it’s possible to replace a reasonable salary with trading, and that’s all I really need.


In this journey of self exploration, I thought back to the happiest time in my trading career, and it was last year when I was challenging myself to make $50 per day on Apple. I had a goal and consistently hit that goal day in and day out. I knew when to walk away and knew it would take less than an hour of my time, so I could spend the day working on other things.


For those reasons I’m considering setting a goal of $150-$250 a day for myself. That’s good money, easy enough for me to do, and gives me an end to my trading day. Looking at it that way it seemed like a perfect solution.


From a different perspective though, I am not the same trader I was a year ago. The other day when I was interviewing my friend Shark, I referred to trading as learning how to play the guitar. When you first start the strings hurt your fingers and leave dents and bruises on them, but over time calluses appear. After even more time calluses grow over calluses to the point you feel no pain from the strings. As a trader you feel pain on top of self doubt on top of greed on top of an overarching fear of failure. You enter the arena every day knowing you will have to fight all of those demons at once while simultaneously being as focused as you’ve ever been. But over time you grow calluses… you grow tougher and stronger and less subject to mental distractions. I am much more caloused than I was a year ago. I’ve felt deeper pain and higher highs and further confronted all the deep dark horrible parts of myself that trading illuminates. I am different.


Therefore, what worked for me last year might not work for me again. Capping my daily profits might actually not be the answer. As I work through this in my mind I’d love to hear your opinion either on here or on Twitter.


Thank you all so much & see you next week.


Have you hit rock bottom? There’s only one way to know.

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