My Trading Story: Never Give Up!

If I can make it so can you! Never give up!

I was able to experience constant exposure to the financial markets because I was employed at a multimillion-dollar broker-dealer specializing in high yield fixed income instruments (this greatly accelerated my learning curve). My duties there ranged from intern to head trader over the years, fuelled by a passion for the markets. My institutional duties involved trade ideas, trade execution, market runs, swaps, product structuring, asset allocations, risk management, repo structuring, etc. This is a story of my personal portfolios:

I started off investing in junk bonds (PDVSA) and with a mix of beginner’s luck and financial naivete I made 40% and was immediately hooked! After that, an interest started brewing in day trading US Equities, with no risk management rules or trading plan I lost 80% of those profits in a single day (an overleveraged “day trade” held overnight on RIO which gapped down the next day on probe news). The crypto craze then took over and I was blinded by greed: losing almost 70% of my stake (a 70% loss requires a 233.33% gain only to get back to even) on money I could not afford to lose; due to the extreme pain of the situation, a promise was made to exit at breakeven (if I even got there). Luckily a gamble on an ICO (Initial Coin Offering) called Dragonchain brought me back to even, and thankfully I exited the crypto space without a scratch (which I still can’t believe happened). With that capital, I started day trading US Equities again with a better strategy and knowledge but lost 25% on trade commissions (back when it was not 0$ per trade). Learning from the heavy toll commissions can take, and limited edge in the short term I gravitated toward swing trading US Equities. During the swing trading days, I lost 15% mainly because of micromanaging and impatience, emotional aspects of the trade, but the trading knowledge was there. Finally, I found a trend following approach (US Equity Market) which resonated with my personality traits, as well as notable improvements on the emotional side which have resulted in double-digit returns ever since. The best part is that it is a never-ending journey! We are all continually growing, humbled, taught, and appreciative of the best teacher out there: the market.

Any worthwhile endeavor requires consistency, patience, and hard work. I want to share my tips based on my experience to help speed up your trading learning curve (generally oscillates between 1 to 10 years depending on the person):

1-Have a trading journal: Accountability lets us be aware of our mistakes and improve them, I have a record of all my trades dating back years.

2-Read A LOT: I read every trading book I could get my hands on (more than 100, literally), some concepts may be repetitive but that’s what makes them stick; each book has a hidden gem.

3-Get a mentor: Having an experienced trader help out makes all the difference. My ex-boss was one of the best traders in the fixed income LATAM/US Equity space in the region. His insights, experiences, and trading wisdom have been an invaluable part of my growth. I am forever in his debt.

4-Trade real money: Paper trading has its place but it is not very effective developing the hardest part of this game: the emotional side (that 70% loss I had sure got my blood flowing!). That being said DO YOUR HOMEWORK before risking capital. As a rule of thumb invest an amount you could lose without drastically affecting your financial situation, but if lost would hurt (skin in the game).

What’s your trading story?