A trader from OneOption has decided to share his journey with everyone. It is deeply personal and I thank him profusely for sharing it. Over the past few months I have watched Tamdak work every day and he has become an extraordinary trader, however, as you will see - that is not where his story began.
So here is it, from Tamdak, unedited:
In my prior life I used be a Corporate Lending Manager with one of the big four banks in Australia with responsibility for assessing and approving residential and commercial tower developments for mainly large corporate clients. These would be substantial developments that required enormous amount of work and pressure – a development could easily be over 150M+ and I would practically end up writing a damn book about it, covering every foreseeable risk for the bank, from market risk, industry risk, financial risk to such risks as contamination and environmental. This was exhaustive work and it all started to take a toll on me. In 2015 after returning from a 7-week holidays in USA, I took a one-year career break with the intention of becoming of a full time trader, a fact unbeknownst to my wife who always had the view that I would go back after de-stressing and re-charging my batteries. But deep down I knew I was done with the bank, and I had to make trading work to replace my salary. One of the reasons for taking this leap of faith was that by this time I got lucky on some resource stocks which were pure gambling plays akin to buying bitcoin in 2011 but no way near the incredible returns of bitcoin or some of the alt coins. As you know Australia is resource rich in every mineral type and the landscape here is littered with penny stocks and if you happened to hit the right one, as I did on a couple of occasions, the paydays are impressive. This emboldened me to take the jump because I had some buffer and some lasting power. In the beginning, as most new traders do, I gravitated towards momentum stocks and very quickly got taken to the cleaners suffering devastating losses. But like an addict looking for the next fix, I kept turning up for those same momentum plays hoping that they would go on those magical runs, as they sometimes do, but invariably I happened to be on the other side of those runs. And I would do options, most of the time ATM or slightly OTM which are classic newbie starting out plays. By the time my career break ended, I had cleaned out my IB account but was able to replenish it by selling some long-term stocks. I also at that time put in a lump sum reduction of 100k into my mortgage to appease my other half which exercise on my part was purely a defense mechanism to fend off arguments but also, and more importantly, to demonstrate to her that trading was working for me and that I will not be going back to the bank. This 100k to the mortgage was like 7 years of principal reduction so everyone was happy! So I formally resigned in 2016 and set out to make trading a career on the premise that I will provide the exact monthly salary I was earning at the bank. In 2017 and bit of 2018 I kept doing the same things and losing money. I specialized in letting my losses run and cutting my winners! I was getting good at that and perfected that to fine art, so much so that this strategy would assist in the clean out of my trading account again. My savings had dissipated by now and I was now drawing down on my long term stock portfolio every month and providing that as replacement salary and kept this charade going, so essentially taking money from my left pocket and putting that into my right pocket except that whilst the right pocket was funding our living costs, the left pocket had dwindled down and it was on it’s last legs.
In 2018 our family suffered a tragedy that inexorably altered our lives. By this time my failure to make money was already bringing about depressive elements in my life which subsequently spiraled into serious depression as a result of this one particular event. When some drug eventually brought me back after weeks of treatment, I had to do a serious introspection of my precarious situation. Now the option of going back to the bank was taken off my hands by circumstance as I had to assume two roles now, although I had been mulling over that bank option for some time. But I was in my early 40’s at that time and I shuddered at the prospect of going back into the corporate world given the fragility of my mind. I shuddered at the prospect of Monday morning buzz meetings, Friday debriefs of the weeks performance, one on ones every month with your superiors, quarterly appraisals with your superiors, I shuddered at the prospect of boardroom meetings with large clients again and so on and so forth. I hated all that and knew without an iota of doubt that it would take me back into the dark place very quickly and this will have far reaching ramifications for my girls and it was thus incumbent upon me to ensure my emotional wellbeing was always maintained for their sake. Although the last three years was painful to say the least, at least I was the master of my own destiny and trading may after all, be an avenue to sustain me and my family, because by that time I was getting decent in some aspects of trading such as charts reading etc and thus the three “lost years” may not have been in vain if I can only find the magic sauce. Thus began my quest for the holy grail, which btw for newbies does not exist. The sooner this fact is inculcated in their psyche, and in their formative trading years, the better they will be in realizing that the need to put sheer hard work to make this work, and nothing else will work. I devoured YouTube looking for trading related materials, tried this and that, even doing riskier plays like selling naked puts but when I had to take assignment on some high priced stocks and having to roll down on some plays for months just to avoid assignment thus having significant margin tied up for extended periods, and not being able to do anything else, I stopped doing that. At that time, I also had accumulated a number of no chance in hell biotech stocks hoping for breakeven exit but the bags were just getting heavier. I needed to latch onto something, some sort of inspiration and a validation to keep going even if it was based on false premise, and I needed to believe that it was possible to earn a living from day trading.
Then in Nov 2018, I think the most significant thing happened for me, I came across a trailer of Free Solo on Youtube and thus came across Alex Honnold and his incredible achievements. I became fascinated by his achievements, particularly his achievement in climbing El Cap in Yosemite without ropes and being the only person in the world to do that. New York Times describes it as “öne of the greatest athletic feats of any kind, ever”. Others may have a different view on this but for me that is the greatest individual feat in human history. I rank it above anything anyone has done before, Imagine the mental fortitude and physical prowess that is required from someone to be to clinging to a sheer vertical wall 700 meters above just by the tip of your fingers and toes knowing full well any wrong move will lead to certain death and he has to subdue his fear and physical pain for over 4 hours when he climbed El Cap. And he knows he has no option but to find a way to go up, he cannot go down! What an extra-ordinary psychological state of mind one needs to be in to be able to do that? He was asked on 60 Min how do you control the adrenaline rush and fear at that height because remember every step he takes he has to look down at his toe footings so he would be seeing the scary heights every step he takes and constantly doing that all the way to the top. He replied that there is no adrenaline rush because if there was any, it would suggest something has gone wrong and that would be a precursor to fear. Alex also said he practiced with a rope about 50 times over a number of years before he did that, and he mentioned that every year he would go to Yosemite and look up the wall and say this is the year he will make the attempt but he would back out because his mental and physical preparation just wasn’t there. This is a very important point that resonated with me, here I was, and by extension many new traders, who want to jump into the lions den against the smartest and best funded traders in the world, with billions of dollars available in research funds and ability to manipulate and move stocks, without any proper physical training, which in our case could probably imply locking down a tried and tested strategy, and without any mental training, how ridiculous is that? I needed to evaluate everything about my trading and an introspection began and thus a hiatus from trading for a few months where I needed to train my mind and learn a strategy that will work. Firstly, I had to dispel from my mind any grand fantasies about driving into my driveway one day in a Lambo, or living by the sea. I had to get real because by now money had run out and I was dipping into my Superannuation Fund which, I may be wrong about this, is like your IRA or 402k?? not sure about this. In Australia we can create our own managed funds called SMSF (Self Managed Superannuation Fund) where you manage your own investments for retirement but for benefit of the fund and only available from age 60, and it is tightly regulated by the tax man, they really come down hard if you misuse funds for other purposes. After 3 years I started to understand my emotional make-up as to what strategy may be best to fully work on. Swinging positions have caused me enormous grief and I wanted to get away from that. Remember that your premarket market open at 4am is 6PM Sydney time with market opening 11.30pm. If ES is down significantly premarket, for 5 hours until the open, I would watch ES do it’s dance and know for sure that I am going start red on those bags I’ve been holding, So my psyche was already shot to pieces even before the market opened and the trading day, for certain, will be one of managing further bleeding. No matter what I do, I will not have a positive mindset when I start trading especially when 10 tickers are staring at you in red at 11.30pm open. I would just look for ways to manage and stop further bleeding instead of looking for good trades which would be there because opportunities would be abound by virtue of the increased volatility caused by the large fall in futures. For this reason I used to hate ES/ SPY because the health of my swing positions were dictated by the whims of these two. So with deep trepidation I decided to realize all my losses and these were significant, and get into cash 100%. I still had a little position left in resource lithium stocks which got a life as a result of all the EV craze, to re-fund my accounts. Whilst the liquidation action had the effect of clearing my account again, I oddly felt liberated and decided that going forward, I will start in cash and end in cash, any swing position will only be a minor part of the portfolio and these will mainly be cds and pds and if these positions crash and burn, they will have no impact on my portfolio or do any damage to my psyche. Whilst at that time I had not come in contact with Pete’s catch phrase i.e market first market first, market first, I sort of decided that going forward, it will be market only, market only, market only! I will only trade SPY and scalp during the day and be in cash end of day. I started recording SPY 1 & 5 charts side by side for the whole session and instead of wasting my time watching the idiot box with Netflix or YouTube, I would play and study the recordings for scalp opportunities throughout the day. At any point in time, I would have 3 months of SPY recording in one of my old laptops. I needed to make half of my daily bank salary and that was good enough, for instance if I was earning say $500 a day at the bank, half of that $250 was good enough for me, which when divided by the 6.5hrs of trading session equating to only around $40 that I needed to scalp every hour and that would be easily achievable right? Easier said than done! but over time I started to achieve consistency because as you all know, the moves at the first hour or two and the close are more pronounced and there are plenty of opportunities to scalp only 0.20 on say 300 share size which easily covered my hourly requirement. Even during the compression chop-fest period during lunch time, which I try to avoid there are opportunities to meet my hourly requirement and while all this may sound too simplistic, having a structured plan in place has assisted me in meeting my daily goals and some. I have the national geographic cover of Alex prominently pasted at my trading station in which he is standing at a ledge with no where to go but up, That picture was of his ascent of half dome in Yosemite without ropes and he said that during that climb he felt fear at one point which left him paralyzed and unable to move. He had to find a way and he did in the end climb to the top but it left him unfulfilled and he was lucky to survive. He said that he never wanted to get that feeling again as he wanted to be a great climber, not a lucky climber. Sometimes when positions aren’t going to plan, I look at that picture and try to imagine the turmoil and fear he would be feeling at that time and how he was able to conquer that fear and still climb to the summit. Unlike us he had no choice whereas we have various choices to either stay in a position or take profits or cut your losses. He said he has worked really hard to train his mind to conquer fear and I think we need to become the Alex, to do the same and to control the fear that emanates when positions go against you. I am also getting better in letting go of FOMO. Because I am a scalper, I will sell into strength at the top of 1min candle and if the next 1min candle continues on it’s upward trajectory without me, I am fine with it as long as my goals have been achieved. In the past I would absolutely beat myself for missing the rest of the moves and having said that I cannot remember how many times I;ve given back substantial profits because of greed. In one instance I remember I was up about 16k on a gapper that came out with a catalyst. I got in premarket and when market opened, I was feeling on top of the world. Then it begins it’s retracement immediately around 10am– goes below ema8, I am still holding, goes below VWAP and I am still holding and it bleeds to death all day, and I get out with a loss. This was pure greed in play on my part. But it was also pure pump and dump in play as well. Anyone who got in after 9.30am had very little chance of getting out without a loss, every small pop was met with a larger dump and classic manipulation was at play here. If I remember correctly it popped the previous day AH and already made substantial run then so I guess the bastards had no qualms about coming up with an offering the next day. The abject disillusionment I felt in letting go of 16k plus some of my own money permeated into everything I did in my interaction with my kids who only saw an angry man not a father for a couple a days. I never want to have that feeling again, I feel like I have done all the hard work on the emotional side and for me scalping has assisted in that process. I have seen so much red in my time that now, with a structured mental stop loss plan, I am able to take these losses like water off a duck’s back. I feel like I now have the armor to protect me from being wounded in battle which I have been so many times in the past although fear and greed are always lurking in the shadows and it’s a constant battle. I have ended up with a strategy that provides me with peace of mind, there is no hope element to it, either it works or it doesn’t in the seconds or minutes I am in it and have no qualms about taking a loss even if the daily justifies swinging the position. I see Hari and Dave routinely swing positions and make a killing on those stocks, but these red traders are cut from a different cloth, they are unique and we are so lucky to have them. I cant remember how many times in the past 6 months I’ve seen Hari make money on stocks that are hot today but drifts lower over few days but because of strong daily's and technicals remaining intact he would remain in the position. But what will an inexperienced and newbie do? They will bail at the first sign of deeper retracement because of fear, and which fear sometimes is accentuated by an under capitalized account that will preclude them from holding or swinging position even through the daily justifies doing that. Keep doing that on a regular basis, you destroy your account. As I said earlier, I start the day in cash and end the day that way, it works for me with a tiny position in swing such a AFRM the other day which I was able to farm back to health through some creative repair works which like everything else in trading sometimes works and sometimes doesn’t. But being in cash is liberating as you can do all these things by virtue of having an almost full allocation of capital available to you, something I wont be able to do if swinging a lot where I will have to liquidate positions to deploy capital elsewhere. I do acknowledge that swing trading can be highly profitable and has a place for many people. I also no longer hate ES/SPY anymore now ES could be down 50 pts for all I care, instead I will wait for the open with bated breath and look for the increased volatility with glee allowing me to hunt for short sets or long as the case may be. While I am a scalper thru and thru, and primarily scalp SPY on 1 minute chart, these trades go against what is taught in the chat and thus inappropriate to post them. I can post a lot of tickers which I don’t mainly trade for other traders to consider, but all these tickers have some element of relative strength and relative weakness in them by virtue to them either breaking out or breaking down, so by that definition some of the core underpinnings of Pete’s teaching are inherent in the tickers I post. I just don’t post rubbish, what is rubbish though is sometimes bombarding the chat with stocks which can be counterproductive and preclude traders from doing the due diligence. I believe It is imperative for new traders ‘to learn how to fish themselves and not blindly follow trades posted by someone other those from the featured traders who have a demonstrated track record of consistency. There are some exceptions though such as Shark, Aoodi, Fox and Zippy who I see as becoming red in no time from what ive seen over last 6 months. Remember that by the time a trade is posted, the actual move may be petering out especially if it’s a scalp – the poster of the trade might already be getting out while you getting in. But following trades that have RS and RW element will give greater chance of success and longer holding power because they are supported by other factors which are taught here such as heavy buying, technical breakthroughs, relative strength all underpinned by the amazing 1OP. The new traders’ also need to understand that momentum trading and scalping will almost certainly lead to death of most accounts but following the methods taught by Pete and the featured traders here will lead to long term success if the necessary pre-requisites are there, and these are passion, sheer hard work and mental fortitude. One of the keys is the ability to take heat in a dispassionate manner, when to take this heat and move on and do this day in day out. In that respect we need to become the Alex who can stand on a vertical wall at 700 meters without fear, personifies the calmness under pressure with a single-minded focus to reach the summit. We need to reach our summit in trading and while easier said than done, it is possible as demonstrated by Pete and the featured traders day in day out. Trading is hard, bloody hard and the high attrition rate in this field speaks for itself. It is also an equalizer because a person with the right mental temperament can excel in it when a highly educated person coming out of Harvard or Stanford may fail miserably. When I was in the bank I used to manage an Italian bloke who had no university degrees and he had various loans with us, and so I would do an annual review of his facilities when he provided his tax returns, every year he would consistently demonstrate gross earnings over 400k - 600k and all he was doing was selling premiums, so just goes to show that there are many strategies that can work for one if they work hard, have the desire and follow a structured path as shown by Pete I am sure that after reading my story, a new and developing trader will find many aspects that they shouldn’t do and if they do identify this, then I feel it was worthwhile telling my story.
Tamdak
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