Know Where You Are In The Market

Question:
I was an accountant out of university, which I found to be boring, unrewarding work. I slowly got into futures trading in 2004 because I really didn't have much money and it was a way to maximize my gains. I quit my job in 2007 and have been trading full time ever since. I just completed a P&L of my trading since 2007 and found out that I have not made a ringgit doing it and actually lost almost RM15,000 during the last 2 years!

It’s amazing every time I close a position with some gains it invariably runs up another level. When I let my winners run, I end up (umpteen times) turning them into losses. I always cut my losers, but, when you trade futures, you have to be very alert or you can lose 30% in 30 minutes. In spite of all of this, I really believe in my heart that I can be successful at this.

This is probably the longest question you have ever received, but I feel as if I am at the lowest point I have ever been in my life. At the ripe old age of 35, my career seems to be over. I am no longer a viable candidate in corporate Malaysia and the one thing I love to do I am awful at, no matter what adjustments I make.

As someone who hears and read postings from many traders in your blog, can you relate to where I am? Can you offer any advice to get me out of this slump? I really need your help because I can't really talk to anyone about this because they don't understand.

Frank Lee Ipoh mari .....

Answer:
Frankly Frank Lee, I am surprised that it took you, an accountant, two years to realize you were losing money. Successful traders know their positions and their financial standing, any minute on any given day. In tournament, game or sport, if a player does not know where he or she is in a flash, folding is the prudent option. It sounds as if you do not want to fold nor surrender, so I suggest you act more like an accountant when trading >>>

Know your numbers especially the score !

As to letting your winners run and then finding you lost your profits … The only way this “strategy” works is if you protect your profits >>> TRAILING STOPS. ZL believe our luck, chi, ong or whatever you wish to call it changes everytime we allow "boy-scout" mistakes to happen. We are the creators of our destiny.

Obviously, you are not doing this. Consider learning more about futures trading and money management. You must know when to call it a day, if you want to continue trading futures. Did you check if your sixth sense is switch back ON?

Yes, I can relate to your problems, and here is my "tough-love" advice. At 45, I lost money aplenty in a failed business startup. As if things weren't bad enough, along came the 1997 financial crisis......

It knocked me on my ass for an agonising year. I thought to myself >>> adjust or die! Slowly but surely, my pathetic concern for self-loss ended. I kicked myself in the same fallen ass and started again. It took some time, but today, I am in better financial shape than back then, and I am enjoying life more than ever.

You, my friend, are ten years ahead of my pace (me born in 1952), and from what you have written your position is much better than mine was in those dark days. So buck up, kick yourself in the butt, and stop focusing on self >>> self pity is the most damaging to self confidence. Look out to the world, draw the outside in to fill your pathetic void, and move forward.

Oh, and if you can’t figure out how to make money at trading, find something else to fill your passionate side and do that. 2 wrongs don't make a right.

Trade in the day; invest in your life ….....

Regards

ZL