Long Posts

How I failed my way to market success!

Durable success in trading comes from self-knowledge

This is a guest post I originally wrote for Brandon Clay at Tradingstory.com

If there was an award to be won when it comes to how much one has failed in the markets, I think I would be the clear winner! To give you some context around this statement, I have to start from the beginning…

My interest for financial markets coincidentally started when I became old enough to understand the necessity of having a substantial amount of money in order to have a good life.

From the young age of 16, I grew more and more fascinated by compound return tables, quotes, and market-related news. Yet, I could not understand how one could extract information from the enormous amount of numbers and symbols that did not mean anything to me at all – but I was determined to learn!

Fast forward a couple of years, I had gathered a rather significant amount of money from various jobs I occupied throughout the years and I was finally ready to trade. I still recall my state of mind at that time – a subtle combination of excitement, eagerness, hope, but also delusions as to what was realistically possible in terms of returns. Making money in trading surely seemed easy. So I thought!

For a very long time, I struggled with bringing in consistent results from my trading operations. While I did make money here and there, I almost always ended up giving back those profits to the markets – and more!

Psychology glues everything together!

Over time, I had developed an efficient edge and a sound risk management technique, but trading success still seemed elusive; so close yet out of reach; so esoteric. I didn’t know much about the role psychology plays in high-performance endeavors, and I automatically thought that I had the innate capabilities (or talent) to operate my trading methodology.

Like most, I came into this business with my backpack of insecurities, denied impulses, bad habits, fears, which was an impediment to the flawless execution of my methodology. Still, I thought that I would make it as a consistently profitable trader without a profound work on myself.

I was consistent alright – in failing! Small wins and big drawdowns became a common thing for me; anxiety, stress, despair became part of my reality. And the worst is that I didn’t seem to learn from those experiences since I kept making mindless and impulse-based trading mistakes week after week; month after month.

In September 2011, I blew my account after spending 5 years losing money. I was left broke and broken with nothing to else but losses and painful experiences to account for. My repeated failures in the markets had taken such a toll on me that I was in a very bad place psychologically. I became prisoner of my inner conditions (disparaging thoughts and emotions) and I was on the verge of doing something so horrible with myself that I now quiver just by the thought of it.

The awakening

I took a break from trading for an undetermined amount of time, and during that time fate had brought me to a meditation retreat in the South of France. There, right in the middle of meditation, unable to calm my mind, I thought of all my past mistakes and failures, whether they were trading-related or not. Seated in a crossed-legged position, I began feeling angry and frustrated at myself – so much that tears started dripping from my eyes.

Right then, at that very moment, I had a great epiphany: How did these thoughts and emotions assert so much control over me? With great curiosity, I began watching them swirl within me like a cyclone. A few moments into this observation I noticed something rather peculiar. I felt detached from those feelings of anger, frustration, despair – as if emancipated from them. I still felt the feelings swirling within me, but since I was merely observing them they didn‘t seem to affect or color my experience of the moment.

A deep peace, then, settled within me and soon enough thoughts and emotions began to dissipate, just like a cyclone loses its intensity and slowly fades away with time.

All that time, these feelings and mental occurrences defined who I was because I was unconsciously granting them permission to have power over me. I was over-identifying myself to them, and in many ways I was attached to them without even knowing it. At that very instant, I knew I was onto something.

A Paradigm Shift

After the retreat, eager to deepen my understanding of myself and how I essentially created my own pain and suffering in trading (but also in my personal life), I began spending a lot of time meditating.

With time and practice, I slowly became an objective observer of my inner conditions, and soon it all began to make sense. All that time, I had the wrong approach to trading, even more so to life! I was seeing this whole endeavor from a right and wrong perspective, and my ego hung onto every trade I placed.

I viewed the failures I went through as a representation of my self-worth, so I was unable to learn from them. I was a chaser of short-term emotional gratification and I clung onto what feels good and easy in the moment while repudiating what is hard.

But now, observation suddenly gave me the benefit of choice. Anger, frustration, impatience, fear, greed – I could choose to act on those or not. And I didn’t have that element of choice before because I was over-identifying with my thoughts and emotions. I felt I was them and I had no other choice but to act on them. This expressed itself through my actions in the markets.

Observation (of my inner conditions) made me realize that there was a way of trading that isn’t contingent upon following every discursive thought and emotion that comes careening into consciousness. This way of trading had always been available to me, but I was too much engaged with my thoughts and emotions to see it. This realization brought a complete shift in perspective. Trading at that point took a whole new direction for me.

2013 was my first profitable year in the markets, where I was up 54% in my bigger trend following account. In 2014, I returned a respectable 49% on that same account. 2015 was a tough year to trade and I am ending the year with a modest gain of 13%.

I always wanted to write a book, so I decided to write one where I would share my struggles in the markets; how I turned my results around; my philosophy on life, my daily trading practices, etc. Paradigm Shift (my book), was just intended to be a side project with no real ambition behind. In fact, most of the proceeds from the sales of the book go to charity on a yearly basis. However, the book was acclaimed and endorsed by several best-selling authors and experts – Dr. Van Tharp, Gil Morales, Dr. Chris Katcher, Denise Schull, Steve “SLIM” Miller, etc. It was received so well by the public that I decided to write a second one. Zero to Hero is my most profound piece of work yet and became an amazon best-seller right from the get-go.

Conclusion

We don‘t need a Ph.D. to understand the nature of our own mind. We just have to make ourselves available to learning more about the nature of our dissatisfactions – and few people are truly willing to do that. I guess my story attracts and inspires because I am a normal person. I don’t have anything extraordinary; I don’t possess any special talent. I am just a regular guy who didn’t give up. Regardless of how much time it took, I finally realized that success isn’t something you reach – it is a journey! If you don’t learn to enjoy the journey, success will always seem elusive and illusory. I don’t know how my story will end, but nowhere will it be said that I gave up, and I hope that you will also find it within yourself to give trading all you’ve got. I promise you, it is well worth the effort and the pain!

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Yvan
I've been trading for a living since 2006. By merging mindfulness (an in-depth study of the mind and its tendencies in the present moment), a good trading process, and an efficient business practice, I went from being a losing trader to a consistently profitable one. Through my work here at Trading Composure, I aim at helping you do the same.
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  • Andraz

    As always an insightful and inspiring article. Keep up the good work in 2016!

    • tradingcomposure

      Thanks Andraz, I will! I wish you all the best, and thanks for reading!

  • Michael

    Great article, thank you for sharing your real story!

    • tradingcomposure

      Thanks Michael… I really appreciate your comment!

  • Shawn Luca

    Excellent post. I’m having similar problems with my mindset. Now I want to read your books.

    • tradingcomposure

      Thanks Shawn. I appreciate it. I would suggest that you start with Zero to Hero. It’s just an easier read and it’s better written. I wish you all the best. Let me know how your journey goes

  • Lee

    Hi Yvan, Amazing read, thank you for sharing. It was almost like reading my own story, meditating has been extremely influential in my own life and trading.

    Looking forward to many more great posts

    Hope you have a great 2016 Yvan

    • tradingcomposure

      Thanks for reading Lee. I really appreciate it! I’m glad you’re enjoying the benefits of a regular meditation practice.. Too many people think of it as woo-woo, but the reality is that it’s just brain exercises. If you exercise your brain (the device through which you see the world) your whole experience of living changes!
      Have an outstanding year as well Lee!