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.
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.
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!