• DayTraderWayne

10 in 10


Ten years ago today (May 20th, 2008) I quit my job. I gave up my career. It was one of those life moments I’ll never forget. I had enough. I worked my ass off at that career and made damn good money over the years. I was a freakin’ miserable though. I hated my job. I hated my life! I was tired all the time. Overweight and out of shape. Drank too much (probably still do, but hey no one is perfect). I could have been making double what I was making, and it would have just made me more miserable. The salary finally stopped giving me “my fix”. I was getting older and I felt like my entire life was being wasted at work.

It took me YEARS to get up the courage to quit. I actually made the final decision and promised myself I would quit on September 7th, 2007. I’ll never forget that moment either. I was poolside in Key Biscayne Florida listening to She Wants Revenge when I had an epiphany. I took the photo you see to commemorate and remember the exact details of the moment. It took me another 256 days to finally DO it though. It also took a while to SAVE the money I would need to be able to quit. The bills don’t stop and omg Cobra and health insurance are freakin’ expensive. It was a MAJOR life decision and one of the toughest ones I ever had to make. But I HAD TO QUIT. What took me so long? Two things. As much as I hated my job, there were a few parts I absolutely LOVED, some of which I still miss today. Although teaching our course has brought most of that back into my life. But the biggest reason was simply FEAR. FEAR of the unknown. FEAR of change. FEAR of what would come next. FEAR of giving up everything the job provided: salary, health insurance, stock options, 401K match, paid vacations, security…

Luckily, I finally mustered up the courage.

So, I finally quit and OMG am I glad I did. It was my #3 “correct” life decision so far. It didn’t always feel this way though. It felt great in the beginning. I was on an emotional high for the first month. I had finally done what I dreamed of doing for years! Not to mention I was experiencing what I know now was beginner’s luck when it came to trading. I was making $$$. It seemed easy and I couldn’t believe I waited so long. Then reality set in and there were days, weeks and maybe even months of insecurity. The beginner’s luck wore off and I quickly realized I had NO clue what I was doing. Then came the sleepless nights staring at the ceiling thinking to myself what did I do? What if I don’t figure out this Day Trading thing? Then what? I can’t possibly go back to my old career!?

Turns out all those worries were for naught. They did however motivate me to get off my butt and figure it out.

Even though “I’ve been trading for 10 years” the first 4 weren’t exactly full years focused solely on Day Trading. In fact, during those first 4 years, I didn’t respect how difficult it was to become consistently profitable. I focused on everything but Day Trading. I treated it as my side project and more like a hobby. That lack of respect resulted in a severe lack of focus and profits. During those 4 years I did a few other things:

Completely remodeled the exterior of one house #1.

(new roof, siding, windows, doors, kitchen and more)

Lost 2 dogs to old age.

Got married!

MAJOR renovation of my wife’s house .

(full Kitchen remodel, 3 season room and countless other things)

Adopted 2 new dogs (Weims) in Canada.

Sold the wife’s house.

Moved into house #1.

Started shopping for a new house #2.

Bought new house #2.

Moved into new house #2.

Started renovating new house #2.

(so far: kitchen, 2 bathrooms, one bedroom, office, exterior work, and countless other projects)

Super Storm Sandy – 14 days no power.

Oh, and fell off a roof landing on my back and getting hit in the forehead with a brick paver.

(long story for another time)

You course takers out there just got a little insight as to when, how and why I came up with Rule #10. And that’s just the big stuff off the top of my head. As you can see, not a lot of time for Day Trading there. Anyone who is a DIYer can appreciate how much time and energy those types of projects consume. Here’s a quick example of my handiwork:

In the spirit if of “if I knew back then what I know now”, I’m talking today about the top 10 things I wish I would have known on day 1 of my Day Trading career. The top 10 things (in no particular order except for #1) that if I thoroughly understood and believed in them on day 1, the amount of time it took me to figure this out and become consistently profitable would have been drastically shortened.

1: Day trading is freakin’ hard.

2: Day trading isn’t a spectator sport, but it is a team sport.

3: LESS is MORE.

4: Anything really CAN happen.

5: Being right gets you NOTHING.

6: You’re going to be wrong all the time AND THAT’S OK!

7: It’s all about the ENTRY.

8: YOU have to figure out YOUR process.

9: And before that, YOU have to figure out YOU.

10: Day Trading IS LIFE amplified and in your face every minute.

1: Day trading is freakin’ hard. I know I talk about this one A LOT. You can read an entire blog about it HERE. One of the biggest reasons I preach about this so often is simply this: The #1 thing that separates a GTMI and a NGTMI is work ethic. How much time, effort, pain, and sometimes $ are you willing to sacrifice to become successful at this? I’m NOT smarter, faster, taller, thinner and/or better looking than anyone else, I just work harder. That was the case in my prior career and it’s certainly the case when it comes to Day Trading. Grind it out. Stop looking for the easy way because it, just like the holy grail, doesn’t exist.

2: Day trading isn’t a spectator sport, but it is a TEAM sport. Day Trading can be lonely. Sitting in your office alone with you screens. Things go well and there’s no one to celebrate with. Things go badly and there’s no one to lean on or vent to. In my opinion, that’s where a great team (like the one in Mike’s chat) can help tremendously. Not only can the right chat room be LOTS of extras eyes looking for your setups, it can be there for you in countless ways. Then, once you find those setups with your own eyes and/or someone else’s, you have to push the freakin’ buy button. You have to put money at risk. You can’t just sit there and watch. Well, technically you can but that doesn’t help pay the bills. You must be IN the game. You must step into the batter’s box, take the bat off your shoulder and swing at every good-looking pitch coming your way. Sometimes you’ll connect with the ball and hit a single or even a double. Once in a while you’ll even hit a home run. More often than not, especially in the beginning, you’ll strike out. LEARN from and accept full responsibility for each and every strikeout and you’ll be well on your way.

3: LESS is MORE. I read every trading book. Studied and tried to master EVERY technical indicator. I went long and short every setup I could find. Held stuff overnight especially when the trade didn’t work. Followed earnings releases and watched every economic indicator like a hawk. CNBC was on from 6am to 7pm. While it’s great I learned all of that, NONE OF IT made me any money Day Trading. It took me far too long to realize that price and volume tells you what you need to know. Everything else is simply noise. I don’t care what the company does, how good/bad earnings were or are going to be, what the P/E ratio is, how much debt they have… I care about the chart and the tape. PERIOD. I’m a Day Trader. I’m not an investor. KISS.

4: Anything really CAN happen. This is so cliché. After you trade for a while, you understand just how accurate it is. The stories traders can tell about things that cost them money that you would never guess are endless. Here’s a small list from my experiences: a woodpecker, the Witnesses ringing the doorbell 4 minutes after the open, fat fingers, wifi, mouse batteries, going to lunch and still owning SOME shares, shutting down for the day when I still owned some shares, following someone on social media, following some random person in chat, saying $wtf, my dog throwing up on my foot… One of these days were going to have a webinar and see who has the best story.

5: Being right gets you NOTHING. ANYONE can “call” a trade. ANYONE can learn how to read a chart and spot multiple things that are likely to happen. Whoopie do. That doesn’t pay the bills. You see this all the time on social media and in some chat rooms. You know the ones, the trader who throws out 20 ideas and then brags about the 1 that worked. Crickets on the other 18 that would have cost you WAY MORE than the 1-2 that worked. Traders who make $ are the ones that can consistently execute. Too many traders can find setups, but they just can’t get the whole pushing the buy button down. Don’t worry about being right or wrong. Worry about pushing the freakin’ buy button every time you see on of your A+ Setups.

6: You’re going to be wrong all the time AND THAT’S OK! This was a major struggle for me. At my prior job, I wasn’t allowed to be wrong. When other people were wrong I had to fix it. When it comes to trading you can’t fix anything related to the market. You have ZERO control over what is going to happen. It’s simply about the math and playing the odds. Note: GSP members can read a bit more about this on the member page under “Wayne’s weekly trading rules”. Once I finally understood that there is no possible way to Day Trade without being wrong all the time and that it’s just part of the job, I was finally able to just trade.

7: It’s all about the ENTRY. This goes back to the execution piece. Early on I had the “it’s all about how you manage the trade” philosophy drilled into my brain. I finally realized that if I can’t figure out HOW and WHEN to get INTO a trade what good does it do me to know how to manage it? I finally came to realize that nailing the entry is everything when it comes to Day Trading.

8: YOU have to figure out YOUR process. You’ll never make it if you don’t develop your own process and find your edge. You can’t be consistently profitable over the long haul by merely following other traders. Following another trader’s ideas who you respect (like how I follow some of Mike’s ideas) should be icing on the cake, not your primary source of trades. You must develop a playbook consisting of A+ Setups. These A+ Setups must be backed up with math (win rate % and R multiple). And finally, you must execute (see #5) every single time you see one of these setups set up. This one is really hard for people thanks to social media. It’s far too easy to follow people. You see someone claiming big wins on twitter, so you follow them for a while until you realize you can’t replicate the results and/or their results aren't real. You start to get frustrated and think less of yourself because they are killing it and you’re are not. Then you move on to the next person and the next... Stop following and learn to trade for yourself. Let me be crystal clear on this point again: You’ll never be consistently profitable merely following someone and that includes me. And trying to follow 10 people in 6 different chat rooms doesn't work either.

9: And before all that, YOU have to figure out YOU. You hear that 90% of all Day Traders fail. I actually think the number is much higher. You also hear that 20% of Day Trading is technical and 80% is controlling your emotions. I think that second number is much higher too. I think once you learn the basics, it’s all (99%) about YOU and that’s exactly why so many people fail. It all comes down to intellectual honesty. Can you be honest with yourself about your short comings, your flaws and what you suck at AND then develop a process to FIX or work around those flaws? Most can’t even admit the flaws, so how in the hell can they ever develop the process? One of the things I love THE MOST about my career as a Day Trader is how much it has taught me about myself. I never dreamed that this would be a struggle for me but it was. My prior company PREACHED and demanded intellectual honesty. But Day Trading was so much different and so much more involved that I had to dig WAY deeper in my psyche than ever before. I still continue to learn more and more each day. When I was struggling as a Day Trader it wasn’t the markets fault. I didn’t blame the HFTs, the algos, my computer, my broker, the unfair edge the bigger players have over me, or any of those excuses you often hear. I blamed ME. I didn’t have a process. I was throwing darts. I hadn’t found my edge.

10. Day Trading IS LIFE amplified and in your face every minute. Let me be frank. If you suck at life, you’ll probably suck at Day Trading too. Every single second of every single trading day you are battling yourself. You’re battling every single stupid, irrational, and over emotional thought, impulse and decision you are capable of making. We’re human. It’s truly amazing how dumb we can be at times. How quickly we can go from normal, calm and completely rational to $WTF and off the rails. In trading, just like in life, it’s those $WFT moments that will ruin your career. And you can make one of those $WTF decisions at any given moment. There’s no one around to stop you. I’ll just buy more, what’s the worst thing that can happen? is just one example of what I’m talking about here. There are countless decisions that in a split second can set you back both emotionally and financially days, months, years or even blow you up all together. You must control your emotions, thoughts and impulses every single second of every single trading day. Just like you should be doing in life.

I get the question(s) all the time about how, why and when I quit my “real” job. For those of you out there pondering this VERY difficult life decision (and I know there are A LOT of you), hopefully my little story here will help you make a better and more informed decision. The best advice I can give you: YOU will know when and if it’s the right time. Trust your gut. Well, maybe trust you gut. More on that next week…

Please understand, NO ONE can answer that question except YOU. Other’s will say something like sure, quit your job, follow me and we’ll turn your 500 bucks into $100K in no time! That’s pure BS and I encourage you to run away from those folks.

Keep in mind there’s nothing really earth shattering new in this blog. You’ve probably heard most of it before, especially if you follow me at all. But hearing those 10 points above is the easy part. You have to truly get them. Not only understand them, but believe in them. They must be engrained in your brain and part of your belief system today, tomorrow and every day going forward. And if you’re disappointed in this blog because you thought it was going to be some inspirational crap about how I gave the finger to the man and turned my $500 into millions, you’re in the wrong place in more ways than one. #NGTMI

Finally, and I can’t say this clearly enough: It’s 1000% worth the time, effort, pain, frustration, tears, broken keyboards and $ to figure it out. Once you figure it out. Once you get over all the hurdles. Once you find your process and develop your edge. Once you figure out YOU... It’s the best damn profession out there. The rewards, freedoms and lifestyle it can provide are endless and are the envy of those who simply can't be honest with themselves. Be a GTMI.

So, start figuring out YOU and YOUR process. And remember that edge I keep talking about? It’s in your head, you just have to find it. You too can do this!

Thanks for reading!

Questions? Comments? Reach out and/or leave a comment below. Seriously, leave a feakin’ comment will ya?