Life without trading, love or loss?
At the start of this year I decided that I would stop pursuing trading for the immediate future. Poor capitalisation and family commitments meant it had gone from being a dream that would one day yield financial independence to something that was actively causing stress, three months on I’ve had time to get a fresh perspective and work towards the long term plan, so I thought I’d do a post on where my head is at with trading, some cool developments from Jigsaw and shed a bit of light on what I’m working on behind the scenes to eventually bring me back to trading.
2018 – The year of the unplug
Giving trading up was a hard call for me, I’ve been actively working on my trading goals for so long now it felt like I was throwing an old friend out into the cold. Don’t get me wrong, my trading friend and I had some rocky spells. Initially we misunderstood each other, argued about our goals and disagreed on our view of the world. Over time we became closer, I began to understand trading and respect the mechanics of how it works, and in return trading gave me an honest appraisal of what can be achieved and let down it’s guard, dropped it’s playboy persona and showed me who it really was. Eventually though we parted ways, the markets of course still yield riches for a special few, particularly with the volatility that returned in February, but I stood aside as I watched some great educational material and yet more tools come out of Jigsaw Trading. I’ve been busy with other things, with work, with parenting, being a husband, trying to reduce stress and put time into the house.
I’ve resisted the pull to dive back in a number of times, you’ve committed to having a clean break I told myself, you need to focus on your plan for life. Things would be easy if I didn’t miss trading, I’d be able to accept it was a rewarding, yet ultimately unsuccessful endeavour and look to a future without trading with a sense of calm, peace and excitement, but I do miss trading – a lot.
Trading – The wise old teacher
Trading is an amazing tutor, the satisfaction of minor gains are euphoric but it also doesn’t waste any time whipping you when you make mistakes. It’s the ultimate meritocracy and the only illusions it allows are the ones you choose to erect yourself. A friend once told me coaching is the art of getting the student to answer his own questions, to bring out their own wisdom in order to give them direction. This for me is exactly what trading does, provided you are honest with yourself, with your performance and your actions, trading is a wise old teacher.
Primarily it’s this teacher that I miss. Learning something that is naturally so different to my natural path in life is a really rewarding thing, no matter how slow the progress and ill be honest, not having a future trading end state to work towards has been hard. Don’t get me wrong, having no pressure to do anything outside work th
an be with the family has been amazing, I’ve been able to help with getting my wife’s business off the ground and have even watched a few movies recently. I’ve also started gardening, which I know nothing about and find myself knee deep in YouTube turfing videos.
That said my mind is hardly ever at rest and the space that trading used to occupy has been filled, but rather than being filled with one consistent goal it’s being filled with a thousand different things.
I find myself drifting into thought about what we need to do to the house, how to dig up and re seed our lawn, how to plan for retirement, what type of house we want next, what school my daughter should go to. When the night comes, my mind turns to entrepreneurial dead ends too, should I get started in e commerce? What about Amazon selling? Obviously these ventures do very well for some, but I can’t help but feel that if I were to get back into any venture, I’d rather finish what I started with trading rather than a fresh start with something else that I know nothing about. I’d rather water old friendships than cultivate new ones.
I’m glad I feel this way, part of me was worried that I wouldn’t miss trading at all and that it would fade out of my life easily, with nothing to show for the time and effort invested. Initially it was great to have a break, a clear head gave me some perspective to address how it was negatively impacting daily life, and how to combat the reasons that ultimately lead to me still not being profitable.
Latterly though, I’ve started to miss my old friend. I’ve seen Jigsaw Trading go from strength to strength with their educational material, improvement of the already excellent tools and feel like I’m missing a good time to be in the markets and a great time to learn. Recently Jigsaw Trading released their simulator, and for me this was a big thing.
Resist temptation, remember the long game
Previously, I’ve not been a fan of trading simulators. I don’t think they emulate well the psychology of being in the market and they often don’t represent fills properly. That said, Jigsaw have released a simulator that does represent fills properly which I think, for new traders is an excellent facility. Coupled with their leaderboard (which I found very helpful for accountability) I think it’s a really comprehensive package if you can’t commit funds to the market. I’d forgive you for thinking I’m about to say that I’m making a return to trading using Jigsaw’s simulator and it’s something I’ve considered, even been pulled towards. But alas no, I’m not.
If I were to make a return to trading now, I would be doing it simply because I miss it, because I feel like I miss having my quest and because the order flow space is moving forward without me on board. To do this I think would be wrong, it would be detrimental for my own long term goal, and at odds with why I stopped trading. What’s more important is to stay focused on the path I’ve set myself, so that when I do return to trading I can do it properly, and safe in the knowledge that I’ve stayed true to my word and put myself in a position to succeed. That all said, I do think I should shed some more light on this and explain what this path is, and some background to how I ended up having to stop trading in the first place.
Debt, Decisions and a path back to trading
I had to stop trading because I ran out of funds, thats it. I ran out of funds because I had a stupidly small account, I ignored all the advice I ever got about capitalisation and went ahead with a small account. I found it very hard to be in the market because one tick swings had my heart racing, the stress clouded my judgement and lead to stupid actions. I could contain losses and was starting to make good calls, get a read and had significant progress on the jigsaw leaderboard, or so I thought. Then a couple of bad days wiped my $1100 account out. Why did I have such a small account I hear you ask? Because that’s all I had, why? Because financially I’d made bad decisions since I can remember, and like millions around the world had a complete misunderstanding of how to manage money.
Whilst I’ll caveat what I’m about to say with the statement that my situation was no where near as bad as some, I think it’s important to address some key issues with finance, investing and trading, primarily because when I was younger I had a completely warped view on how to manage all three, I’d also bought into a lifestyle image I couldn’t afford and I was pretty irresponsible with money. Being short is about the only thing I share in common with Tom Cruise, but that didn’t stop me trying to emulate the Top Gun image, like most other young Navy Pilot’s I knew. I drove a TVR, lived in a beech flat and kept terrible track of money. Looking back, I cringe at how I spent my income. Maverick, I certainly was not.
Previously I’d have said some of this was just down to youthful exuberance and the learning curve of life, now however I’m a bit more educated, I don’t think that ignorance is a great excuse and intend to teach my children differently.
When I was young, I bought cars I couldn’t afford, relied on loans to make big purchases, put nothing away for retirement and spent more each month than I got paid. By the time I was married and in my thirties I had pretty much nothing to show for twelve years or being paid well. A couple of years later we bought our first house and I struggled for a long time because it wasn’t what I thought we’d have at that stage of life, a year later I became a father, was still using credit cards and overdrafts frequently and the only money I had found for a trading account came from some unexpected overtime at work.
Back in my early days of being interested in trading, if I had concentrated on getting my financial ship back on course rather than what screen set up I was dreaming about, maybe I’d have had more to start trading with and subsequently would have had less stress, more time in the market and ultimately would have made more progress. On my cessation of live trading I was pretty down about how I’d played things financially. But what’s the use in getting down about it, at 34 I’m not over the hill yet and I figured I had a responsibility to sort things now, both for my family and our future, but also to myself so that I could return to trading one day and enjoy the journey for as long as it takes, without the stress of not being able to afford it. So I made a plan.
Basically, that plan was to get out of debt, save money for the uncertainties of life, put a solid plan in place for retirement and start playing the long game of investments. Investing has always been a hard nut to crack for me, not in terms of what to invest in, but in terms of what strategy to use, what system to believe in and where to place my efforts in learning. Trading has helped markedly in understanding a few truths about life, one of which is simplicity. Now I just want to keep investing simple, I’d love to make gains well above the market for retirement over the next thirty years, but it’s unlikely. If I can match the market, compounding will look after the rest.
To that end once we are on our feet and in the black investing will be simple, I’ll just be looking at Traditional Index Funds to try and capture the majority of the market’s gain, at low cost. I’m not new to the Jack Bogle school of thinking, but in my naivety I’ve always thought there was a faster track to the big bucks, now with the humility of fatherhood I’ve come down on the side of just making sure the future is taken care of, with as low cost and low risk as practically possible.
So were does trading fit into all this? For me, I can’t trade knowing the money in the account should be elsewhere, knowing that we have financial stress, so sadly I can’t do anything until I deem us able to move, able to commit capital that isn’t critical, this isn’t that far off really, but will still take longer than I’d have liked, but I guess thats the price I’m paying for my youthful folly.
Since August last year I’ve been trying to get this plan in action, we’ve done well so far. Since then (nine months) we’ve cleared over 10k in debt, sold two cars and have drastically cut our outgoings. By the end of the year we will be looking to have our consumer debt totally wiped out, focus on saving a nest egg for emergencies and then save for a trading account. Initially I need 5k and it might take some time to get there, but to me being able to trade in the comfort that the capital associated with the account was saved specifically for trading will be a big relief.
Obviously, this all reflects a bigger shift in how we as a family view life, we intend to pay off our mortgage as quickly as possible and don’t want to ever go into debt again, it is not solely geared around getting a trading account again. I’m aware that it might take a year or two to get to the point I want to be at before I trade again, that is a lifetime in trading and I’m sure things will have moved on, I’ll need to learn a lot and work hard, probably from scratch to get profitable.
To some it might seem drastic to adopt these measures, to others it will seem obvious, but I see our families attempts to address these issues, plan for our future prosperity and work hard towards the goals we set ourselves as doing things properly. Not only do I think I’m doing the right thing by the family, but I’m also doing the right thing for my trading. I’m showing by my actions here (at least I think) that I’ll take an absence from the market now, for prosperity in the markets later.
Ideally, with hard work these goals will arrive quicker than expected and I’ll be able to make a return sooner, ultimately it’s up to me to make that happen. Whilst my posts here might diverge for a while from the specifics of trading, I look forward to sharing with you this fork in the road, I’m genuinely excited.
As ever thanks for reading, I look forward to your comments below and apologise for any I’ve missed, as you can see, other things have had my attention recently. Happy trading to you all, I emphatically wish you all the best of success.