6 Lessons From 6 Years Of Professional Trading

Fun fact, I'm not allergic to bed bugs.

I learned this from spending 7 months on my friends bed bug infested couch. I think they moved in around month 4, but we had no idea until they were visibly intruding.

I learned a lot from my time in Chicago.

I moved there to start trading stocks at a proprietary trading firm. It was a unique time in our financial markets. Marked by zero percent interest rates and constant money printing at the Federal Reserve.

We ran a strategy that benefited from volatile markets. Generally, we made money when everyone else was losing it. The US debt downgrade in August of 2011 essentially made my career.

I spent all of my mid-20's trading stocks. Here are some things I learned along the way.

2011 - You Probably Have No Idea What You're Doing

I was a trading baby. Babies can't do anything for themselves. If no one teaches them, they may never learn. I think every new endeavor is like this. Trading certainly is.

You need mentors. When you get into a highly competitive field, they are the only way to survive. I was fortunate to find two outstanding and experienced mentors in trading.

They weren't gurus, they were practitioners. I sat beside them and watched their every move.

Sometimes it's hard to know who's successful and who just talks the talk. I knew they were feeding their families from trading alone. That's what I wanted to do, so I made a deal to learn from them.

2012 - Grow With Your Mentors

It's amazing how quickly you can go from knowing nothing to being a contributing member of the team. I was probably 80% up to speed within 6 months.

Our strategies evolved. When the market changed, our old strategies quit working. The idea for a new strategy was refined and perfected by our group. It was enlightening to participate in this evolution.

2013 - Grind

The market slowed down. Trading was still profitable, but I wasn't having the success I wanted. This is a recipe for making mistakes.

I had to learn to grind. We did the same thing day after day.

It was tempting try to make something happen. To force it. This is always a mistake in trading. Like many things, the key to trading is consistency.

2014 - Focus On Things You Can Control

I was getting worn down. It's frustrating when you're doing everything you're supposed to do and not seeing the results you want.

It was time to focus on something else.

I joined a Crossfit gym. I needed Crossfit mentally and physically. Too many deep dish pizzas, and "Chicago style" hot dogs led me to carrying an extra 60lbs.

I put my focus on my physical health to get me through a frustrating time professionally. It worked really well.

Plus, I snagged an amazing wife when I was in peak physical condition!

2015 - Go All In When The Deck Is Stacked In Your Favor

There was a flash crash in August of 2015.

This was the volatility event we had been waiting for. I loaded up positions five times my normal size. It paid off big!

However, it didn't last. Markets returned to normal within a few days.

Back to the grind.

2015 was my best trading year, mostly because of these few days.

2016 - Know When To Hang It Up

Profit margins for our strategies were constantly shrinking. The only way to keep profits rising was to increase our position sizes. In 2016, we really got squeezed.

2016 was a very slow market with the exception of Brexit and the US Election.

Brexit was my best day ever. The lessons I learned in 2015 helped me take full advantage of this opportunity. Markets again returned to a slow pace very quickly.

I think markets truly changed the day Trump was elected. Our strategy relied heavily on correlation. The day immediately following the election, correlations between sectors changed and they never went back to what they were.

I knew it was time to move on by the end of 2016.

In 2017, I transitioned into selling and investing in real estate in Birmingham, Alabama. I love it. I'm starting this process all over again. This time without the bed bugs.

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