Day Trading: How I Overcame Losing It All in 2019

Before I began trading as a form of income, I was just like many of you. Brand new to the trading environment, I was itching for the opportunity to be able to make money sitting in my pajamas at home. I wanted to be a day trader, and I wanted to make big money fast.

Fast money meant many things to me. It meant that I could pay off my credit cards, student loan balances, and auto loan. It meant that I could finally buy my girlfriend that really awesome engagement ring that she always wanted. It also meant that I could finally start saving for a house for our upcoming family to live in. If any of these things sound familiar to you, then I assure you that you are not alone in thinking that trading is a one way ticket to the lavish life.

I wanted it all. I wanted everything in the moment. Making $500 a day sounded like a piece of cake in comparison to my plans ten, twenty, even thirty years at that point in my life. So when I funded my trading account with $10,000, I thought that I was ready to take the world by storm.

Oh, how foolish, I must have been.

After buying a few courses and paper trading for a week or two, I thought that I was ready for the real thing. I set up an excel spreadsheet, like the one that I have provided for you in Chapter 8, where I was projected myself to make a 2% profit every single day. Under this plan, I would be free of the PDT rule in a couple of months.

I was motivated, but I was so very naïve.

Unfortunately, this mindset is what led to a lot of my early mistakes. From losing over 10% of my account in one day to constantly practicing the wrong technique, it really took me a while to become mature about the way that I was trading. The crazy thing about it is that I never knew that what I was doing was wrong. I didn’t know that the way that I was trading was more guessing and gambling than educated positions. I didn’t know that I was making money by sheer luck most days, and losing money because of the same the next day. There were so many things that I did not know, nor take the time to research.

I did not come to the realization that what I was doing was not effective until the day that I lost 10% of my account value. On that day, as I was literally crying on my kitchen floor because I felt that I had failed on my life’s dream, I vowed to never day trade again. I didn’t think it was possible to be successful.

It literally all happened so fast. I had just had a few green days in a row, I think about 4 of 5 days straight, and I was feeling really confident about trading. At this time, I was making anywhere between $25-$60 a day, and began bragging about how good of a trader I was. I didn’t do paper trading really at all, even though my plan was to paper trade on the days that I had run out of day trades because of PDT. I felt that I had the market in my grasp until this one trade took me out of the game for a full 6 months.

Let’s do a little story time on what happened exactly:

It was a Wednesday morning in the summertime, I am still in college at this time so I vividly remember having class today. I took summer classes in college so that I could graduate faster and work on my Master’s degree sooner.

As I opened my laptop and started the TDAmeritrade ThinkorSwim platform for a few moments, I began to see the ETF /NG look really overextended. I’m talking about trading ABOVE the top VWAP with an RSI above 80. It had pushed up huge that day, over 10% since the market opened.

What I did not know was that /NG had been selling off for weeks and that this was the start of the turnaround that analysts were predicting. What I did not know is that /NG had finally broken its pattern, and this was probably the worst day to take a position on DGAZ. What I did not know was how to cut losses or follow the flow of the ETF.

I remember not doing much technical analysis on this day. I may have drawn a few support and resistance lines, but that was about it. I didn’t take the time to identify a direction or look up any news as the why the future pushed up so aggressively. I was going in blind because this seemed like too good of an opportunity.

Easy money.. or so I thought.

I then decided to take an aggressive position on DGAZ because I was convinced that it was bound to pull back at some point. I entered with a full position of about $10,000, and was up for the day for about 20 minutes. I had a $20 profit, but I was itching for more., so I didn’t lock it in. I had yet to make $100 in one trading day, and I just knew that this would be my big day because of all the potential for recovery.

What eventually happened was that DGAZ pulled back, bounced off the EMA line and began making higher highs for the day. At this point, I did everything that I shouldn’t do when it comes to day trading. I went against my plan, and I began trading way too emotionally.

After watching the ETF DGAZ lose over 10% in a matter of two hours, I said to myself that I would never put that amount of money at risk day trading in the stock market again. I felt physically wounded, as if someone had hit me in the head with the fat end of a baseball bat.

I was defeated..

However, a few months later, here I am.

Successful. Motivated. Driven.

This time inspired by the idea of learning from my past mistakes and helping others as well. This time with a different mindset allowing me to be more consistent than ever before. Now I am trading with a plan, and sticking to it, and am living proof of both sides of the trading spectrum.

A newbie who thinks he knows everything, and an experienced trader who understands that there is a lot left to learn.

You see, I made a lot of mistakes early on in my trading career (and boy do I mean A LOT), and my goal is to show you how to use those mistakes as experiences of your own so that you don’t have to make the same.

If you want to learn more about getting started investing/trading in the stock market, I recommend you read this article:

The Most Basic Concept Every Stock Trader Should Know

and here’s the book that led me to begin investing in the stock market in the first place. I highly recommend!

Financial Freedom: A Proven Path to All the Money You Will Ever Need

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