I talk a lot about the trading journey, I’ve written about it in part in previous posts but I thought I’d put some meat on the bones of what I’ve encountered so far, so here’s part 1 of my trading journey to date. Get comfy, it’s a long one.
I’ve wanted to write about the generics of trading education for a while, its a topic I’ve become pretty fascinated with as most aspiring traders probably have. That said, every time I sit down to write about the pitfalls of figuring out what works and what doesn’t, what is good about education and what is isn’t, I found myself wandering into the side streets of how getting educated in the markets worms it’s way into everyday life and naturally the other parts of your life become part of your trading history. That’s why I decided to write a series of posts about what my journey has been like from start till now. I’m not sure how many posts it’ll end up being, I wont even try to say they’ll be short but at least they will help me make sense of it all, and hopefully go some way into proving that retail traders are actual people and not just actors on a brokerage firm’s slick advertising campaign, trading into the sunset from their apple watch.
I often cite late 2008 as the time I got started learning to trade but going through previous emails and Paypal statements it appears it wasn’t until March 2010 when I actually puckered up for some paid education. I see my trading journey as a very long, disjointed and sporadic one. A journey that when I look at it often leaves me feeling dejected and beaten up. All in I’ve been looking at this stuff for getting on 10 years. A decade! Whenever I get to thinking about the reality of that and how I ‘m still not there, capitulation seems the only sensible play, I’d be an idiot to think I have the ability to make it. Then I remember all the other things I’ve done, what was going on around me in my life and that fact that I would check out from trading all together for large periods at a time. It’s been a nearly a decade sure, but I’ve stopped beating myself up about it. I’m at a point where I’m loving it, loving what I learn, where it takes me, what I find out about myself. I’m not throwing untold stacks of cash at it, I’m not being reckless. So I’m ok with how long it takes, I genuinely want to get there in the end, to achieve something and I think is a huge step forward from the initial hopes of getting rich quick.
I first began when I was about 13. I’d had sporadic interest in the markets growing up, or at least in the market as a way to make money. When I was young my dad gave my brother and I a hypothetical £200 to spend in the Stock Market and said that whatever we made as profit he would give us. I was aviation obsessed as a kid, so funny old thing I bought Aviation Stocks. Over the course of the few months we tracked my stock picks I made about £70. It was a nice, completely fluke profit to which I thank what must have been a bull market in the sector.
I spent my £70 on computer games most likely and promptly forgot all about the experiment and the market. In years to come there would be various periods where I would fantasise about getting rich through the big returns and spending my life flying the aircraft that the markets paid for, “The Stock Market always goes up, buy and hold” I’d hear. Sadly I suffered a lot of self doubt in my youth and thus always put any grand ideas of success to bed as my school years came to a close and I naturally became more and more focused on my dreams of becoming a Pilot.
It wasn’t until 2008 when I actually picked up a book on the markets. Again as most beginners do I went straight for the obvious, Stock. It was the back half of 2008, 5 years into my Career as a Helicopter Pilot in the Royal Navy. I had just earned my wings having passed the penultimate course in my flying training, shortly I’d be off down to Cornwall to learn a new helicopter and a new set of skills, but for now I had some time to chill. Not wanting to waste it I got to reading. I’m sure at this point your expecting me to tell you I became electrified with excitement about what I read, sadly this isn’t the case.
One of the books I read was so turgid I didn’t even get through it. I’d managed to pick the least digestible books on the Stock Market I think anyone could find and promptly fell asleep reading them in the Crew Room. A lot of what I read seemed deliberately esoteric, confusing and frankly boring. The liberating and exciting idea of bettering one’s financial situation through the markets was a stark contrast to the off putting negativity I found myself reading. With an impending move to Cornwall and a fresh copy of the Sea King Flying Guide to read, I decided to put my finance fantasies to bed again and get back in the flying training groove.
As I popped out of the flying training system in summer 2009 as a newly qualified Search and Rescue Pilot a few things happened. Firstly I started to take up 24 hour shifts which I loved, but which often had lots of time sat being the proverbial coiled spring, and secondly having finished training the workload in my spare time dropped right off. The result? My brain started to look for something extra to do and what was waiting patiently in the wings?…..Trading.
By the end of the year I’d not made any progress. I was reading a lot about the Stock Market, but from what I could see it was a game of buy and hold that required a lot of groundwork analysing company fundamentals and more importantly significant capital to make any substantial gains. I did not have significant capital, in fact I had negative capital. I was terrible with money when I was young, I pretty much wasted any money I had on bad car finance deals, Friday nights and expensive fad hobbies, I’d bought completely into the bullshit Batchelor lifestyle and whilst I enjoyed it at the time I had no idea how financially uneducated I was or what an unfulfilling a way to live it was.
As the new guy on the Squadron I picked up the Christmas SAR Duty which I’ve actually always found great fun, it also came with a bonus in that I got a bit of extra leave the other side to spend at home. I went home to see my parents and get my first real bite from the trading bug. One night, sat in front of my Mum and Dad’s log fire, sipping a San Miguel and torturing my Mum’s cat with my guitar skills my mind started to wander back to the markets. Part of what I think drives people towards Trading is an inherent and unquashable curiosity about something that they don’t understand, something that is so alien to those outside “the circle”. I think there’s an inherent desire to prove that it isn’t just for a select few, that you have some choice and say in what you attain. It’s either that or it’s pure belligerent stubbornness. For me I think it was both, a belligerent curiosity if you will. That and a mounting pressure of a financially wasteful lifestyle had me thinking about how to make some extra income on the side, ideally pretty sharpish.
One thing I’d found interesting was that all the pay scales for the military were available to look at online. I could see with a few clicks of my mouse what I would be potentially paid for the rest of my working life. You could be forgiven for thinking that that is a somewhat of a strange thing to comment on, or that I say it with a sense of greed tinged dissatisfaction. In fact you could ask why comment on earnings at all?
I comment on it because I think at a root level it’s the same reason Retail Traders have an interest in the game. A trader’s motivation is to profit and I think it needs to be said as straight as it is. This motivation doesn’t necessarily stem from anything dark or dishonest, but to be anything but blunt in the description of what trading’s core objective is would be.
Often you hear ex Pit Traders talk about the excitement of the Pit and how the instantly wanted to be part of it, part of the culture, part of the environment, I can understand that and I believe them when they say it. Retail Trading however is not exciting, in fact it’s hugely boring a lot of the time. It carries a huge risk to your financial, mental and physical health and left unchecked can wreak havoc on your personal life. If you ever hear someone saying that they got into Trading because it’s an exciting way to spend hours of your day I’d keep a keen eye on the length of their nose. They are either telling porkies or trying to avoid their family.
I think that simply fronting up and saying that you got into trading to try and make money to better yourself is somewhat of a taboo, that to admit to wanting trading profits is pure greed born out of nothing more than a misplaced love of money. I don’t think people should feel guilty about it. In the interest of clarity a blanket love of money should be shunned I agree, in itself it’s pointless, money causes huge problems in our world, massive inequality and left unchecked coveting money can do horrible things. Money however is just an arbitrary mechanism for the exchange of value, and I don’t think wanting a healthy supply of that value is wrong. Be it to facilitate more time with family, the ability to live in an economic climate close to the ones you love, or simply to enjoy the things that float your boat. I think the key is to be honest about what your aspirations are.
What are my aspirations? (and you should be crystal clear on yours) Firstly it’s simply to financially cater for any support my daughter might need, second I’d like to diversify my income in case of a medical issue that stops me flying and third I’d eventually like a slightly bigger house, the ability to travel a bit more as we have a lot of family far away and I’d like to go flying recreationally in my spare time. Those things are largely what driving my profit goals and since I’ve become a husband and a father they are so much clearer which I’m thankful for. I’m lucky in that I love my day job, I enjoy it, I feel like I contribute to society and I’ll never voluntarily stop flying, but a lot of people don’t have that luxury and the fact that they legitimately look to Trading as a way to live a life they want to live I think is commendable.
I have always suffered a lot of self doubt, a nagging sense of being cut from different cloth to those that do the things to which I aspire and a general sense that I’m not good enough to achieve the things I would like, for me the day I looked online and saw in front of me my life’s future earnings, already concluded, something in me started to change. There would be a huge defining point later down the line that would change my view of my own potential completely but those pay scales went a long way to planting some seeds of growth going forward.
So back to my parent’s dining room and Christmas 2009. It’s late and the cat has taken himself off somewhere quiet. I’ve been searching the internet for “ways to make money from home”. Amongst all the survey sites, freelancing sites and plethora of scams I come across two things that peak my interest. First is a BlackJack strategy, second is something called Retail Forex Trading and a broker called EToro.
My eyes immediately focus on the trading link but my impatience knows there will be a lot to learn, its past midnight and so I decide to check out the BlackJack strategy first. It’s the classic double down method, I get sucked in, place my £20 deposit and get my free £40 bonus. I start betting with my £60. It’s 1am and I’m up £30. 2am and I’m up to £300, I’m going to be rich. 2:06am I’m at zero, what a surprise!
There must be countless people that have done this, in fact if you check out the Chat With Traders podcasts (and you really should) episode 101 features Siam Kidd. Listen to that and you’ll think I’ve stolen the story from him. He literally did the exact same thing. I did it a few years later than Siam in my parents dining room where as he did it in the Officers Mess when we were in flying training at the same time, hows that for a small world! Credit to Siam, he’s now doing really well for himself both in business and trading, I’d definitely recommend you check out the podcast. He’s got some great views on education too.
Fresh from my BlackJack defeat at 2:20am I decide to check out the link to EToro. This is where it all really began in ernest. Up until this point I’d had no education in economics, finance, gambling, probability, game theory or anything that might make understanding FOREX a bit easier, so I did what most would do and jumped in. It was all double dutch to me, I didn’t understand any of it.
I opened a practice account with the EToro and placed some random trades, not knowing what I was doing and not really knowing what to make of the caricatures of currency pairs on it’s interface. I watched the screen bemused as the quintessential top hat of Britain raced against a waving American flag on my demo GBP/USD trade. Needless to say the trade was a looser I didn’t make much headway with EToro.
By the time I went back to work however I was pretty hooked on this FOREX idea. I’d read that you could make stellar returns with little margin upfront and didn’t need much money to get started. Thankfully something sensible kicked in and I thought it best to get reading again, so I headed off to work again for a fresh year with my first trading book purchase, “Currency Trading For Dummies” fresh from Amazon.
I spent the next three months learning the basics of the FOREX Market, the principles behind trading and who was who in the retail brokerage space. Looking back I was still hugely in the dark, I had no graps of what a market even was, why it was there or what its function was. I skipped past any writings on big institutional players, the importance of market makers or why foreign exchange even exists in the first place. Instead I latched straight onto the shiny section marked “Trading Strategies”.
I felt ready to get going, I got a practice account and put some pretty serious dents in it straight away, it wasn’t long before it had been vanquished by the demons of overtrading and ignorance. I realised at this point I wasn’t going to be able to educate myself, I was going to have to pay for it. The next stage in my development would be hugely frustrating. Nearly two years of conflicting advice, hardly any sleep, a few failed relationships, lots of nay saying and a bunch of money spent. In hindsight it was worth it, I would find a coach I trusted, meet my wife to be, go to a trading conference and ultimately find direction.
All that in part 2.
If you’ve stuck it out through the past 2500 words I thank you. I’ll endeavour to get part 2 out quickly and as ever I hope you enjoyed it and found it useful.
Thanks for reading.