There we were, thehusband and I, now charged with earning all our income trading Mr. Market. We decided to day trade mostly with a few swing trades on the side. We had decided that we needed to guard our capital and come at the market from a cash neutral position. After the ’08-’09 crash, we were cautious. I was flat out scared, and with this now being our only income, we HAD to make it work and we HAD to protect our capital. Finally, we started adding back longer term positions and I dedicated a separate long term account.
Once the Devil’s Market started rising from 666 on the S&P in March of ’09, we started making money. It was too easy. You could throw a dart at a heat map and make money. If I hadn’t been so cautious, I could have made a lot more. If I had reinvested in $OXY even, I’d have made most of my losses back. But how do you go all back in after the experience of watching it all disappear so quickly? You don’t. Your fear steps in and keeps you from repeating the thing that screwed you before. Your fear (pesky emotion) is there to help you learn from your mistakes. But we were making money again….aided by the fact that we had discovered IBankCoin and The PPT. We were smart enough to know that we needed help from pros because clearly we had just screwed it up and could no longer afford to do that. We were making money again and it felt good. We made more money in ’09 than we had made in previous years with salaried jobs.
We had not changed our luxurious lifestyle. We never had a reason too. We lost a lot of money but it happened so fast. In one month, I had lost half the value of my $OXY stock of which I was heavily in and I sold it at the bottom. It took over two years to get back to its 2008 peak.
But we were making money in short term trades and could still easily afford our lifestyle without making any changes. 2010 proved more difficult but we managed to make it by even if we were getting a little behind. I had the attitude that I could make it back and so we still had not changed our lifestyle. By the fall of 2010, thehusband had started a new job and I had joined 12631. The future looked brighter. I made good money in the last quarter of 2010 with the help of The Pelican Room’s Chess and RC and thehusband was bringing in an outside income again. Retirement accounts were set to grow again.
2011 is really starting to hurt. I am a little stunned that I allowed myself to get to this point. And I am fighting those pesky emotions. Worse, nobody seems to be able to get a hold on this market. It is not dropping quickly as it did in 2008, which would be easier, it is just bleeding us at a couple of percentage points per week, now six in a row, seemingly bouncing off of support levels then drifting down through them by a couple of points. How much further can it go? … a lot further before becoming a double dip recession which is rather scary.
And so it is the end of the world as we know it….again. I am a good trader in a tight spot – nothing new there. I have good risk management rules. I was wooed by the crack from the likes of “thebill” and I lost discipline when I needed it most, but I have the skills and intuition to get back on track. Sadly I am losing my optimism. Worse, even thehusband has gone negative, heck even Jim Cramer is getting bearish. This can only mean one thing, we are about to have a rip the tits off Bettie Page roaring rally.
Or we will slowly, drip, bleed and chop down into a double dip recession proving that when you screw up really badly in Mr. Market’s world, it is a world that will end but will be reborn again as it has in cycles for the last 100 years.
I know, I know…I should wait for the right market environment to trade in… but hey, it’s the end of the world, and I feel fine.
If you enjoy the content at iBankCoin, please follow us on Twitter
actually wife,sometimes it becomes a little disheartening. do you ever feel like you just wanna cash everything in, and say fuck it anymore. in late 07-08 we knew what the cause was.now ,it’s the whole damn world going to pot. everything i made,went back. even though i have managed to perserve all of my initial coin.and made some this year. the last six weeks,took it all back…….conviction should never trump discipline. i just had too much conviction for what i held. and that wasnt a good call at all. i thought i would have learned after 08…. i think your post touches a lot of people,only because we’ve done the same..and i hate doing what others do.
@dummeryboy – I wrote this precisely because I know so many traders are going through the same thing. I know it is very hard for most folks to admit that they are having some difficulty. But recognizing that you are continuing to make a mistake is the first step so that you can adjust your current position to help keep you safe in a difficult environment. It would give me much satisfaction to know that someone has become a better risk manager by reading my post. One thing I can never say it enough, always sell the losers. But I think the biggest lesson is the last line that reminds us to wait for what the market gives you. Don’t force it. Trades that work in easier environments are not working here, but some well thought out trades are. I will be taking only the MOST probable trades for awhile. I might even take a day off. ;~)
Did you ever consider cutting back on the luxurious lifestyle in order to have something socked away for a rainy day? Most people will call me nuts, but I regularly keep 8 – 12 month’s salary in various bank accounts (garnering no interest, I know) for a just in case situation.
This big cushion served me very well in 2008 – early 2009. Even though I kept my job during a horrible time for my industry I slept much better knowing I wouldn’t be out on the street if something bad were to happen.
Maybe you already have a big chunk stowed away. If so, kudos.
lol – the husband had no job for 2 years – we used up the spending money cushion. It’s the lack of cushion that makes me a bit uncomfortable in my skin, and when I wrote this initially, I mentioned that we were cutting back on “the lifestyle” to catch back up on the cushion, but thehusband told me he thought it sounded desperate…and that we certainly are not, so I took that part out. You know men…they have such big egos. ;~)
I liked the post and think it may have been even better including the part you were asked to take out.
Personally, I take great pride in my thriftiness (is that a word?). Back in the day when I was broke as hell I came up with a list of “toys” I would buy when I got enough money. I have enough to buy that list 10x over but haven’t bothered buying much from it. Did get a nice set of new golf clubs but that’s about it.
I guess going without for an extended period makes you jaded and no desire for anything other than essentials. Yes, Taylor Made clubs are an essential 🙂
lol – It is easier to be thrifty when you don’t have a family and when you live in Thailand. I also have a child to educate, and my standards are high. In New York, we automatically have a higher cost of living than you do in Bangkock. But I admit that we have been too “UN-thrifty” … so we are reigning it in. ;~)
Choppy markets and downtrend times just are harder to make coin in, either long or short. I respect that this is your real “job” and I know it must be very hard to keep gains coming in. Best of luck.
Thanks @gysc.