Yesterday I blew one of my flagship accounts called "Amor". It was a high risk account (16x higher than professional risk) targeted at smallest scale ($100+) investors. This has not affected any other accounts. For private account management I use only professional risk level.
In this article I'm going to dive deeper into the reasons why it happened.
1. Changing time horizon without logical reason. The risk profile of Amor account was designed exclusively for short term trades. However, in the beginning of October I decided to experiment and take a long term trade on a short term account. So I effectively changed my trading rules. Which means my self-discipline went down. This was due to a recent lack of creativity in my outside-trading life, so this need to create something manifested in my trading life.
2. Depression. I was feeling down for a prolonged period. At some point I eventually reached the "I don't care about anything anymore" point. I'm not exactly the suicidal type (because I don't believe that suicide is the end), but thoughts about death were very common during this year.
3. Some people want to see me fail. As a nice guy, I am subconsciously trying to fulfil their expectations. It kind of makes me feel safer if I don't pop out with my achievements. That's the price of publicity. As a creative and sociable person I wanted publicity because it's a way to share something out my heart, but in trading it comes at a huge cost.
4. Focusing only on trading. I wasn't doing anything else for a prolonged period of time. I became a trading snob. I've heard that it's not healthy but I wanted to see for myself, I thought maybe I'm different. It was hard for me to accept that trading must remain a secondary activity, but actually as I was studying the lives of successful traders who made trading their main activity, I understood that their lives turned out into nightmares. Again, I thought I was different, but I'm not so sure anymore.
5. Allowed myself to think "from now on I'll be fine, I know what I'm doing, I have a long enough track record and I'll never have to do anything else to make money". When humbleness went away it was exactly the moment when things turned against me.
6. Fear of public failure. They say that what you fear most is what's going to happen. So I kind of wanted for this to happen. Me as a soul wanted to break free from my own chains. I wanted freedom to be whomever I want to be. Ironically, this leads to happiness at the soul level. I could have avoided the blow up. I had many opportunities to take early profit or at least break even. But I didn't want that! At the beginning of November I went on a 10 day trip to Sicily and I didn't look into my running trades at all. I already knew I needed a change in life. Paradoxically, public failure was my way of achieving it.
7. Trying to please other people. The Amor account was created for small scale investors ($100+) and its risk profile was 16x higher than the professional risk level in the latest months. In order to maximise gains of course. However, this approach turned out to be completely wrong. By trying to please others I only displeased everyone. Also what I realised that more risk helped only in certain months, but it comes at a price of needing more rules for trade management and of course more stress. The performance of my professional level account (with 16x less risk) was actually comparable to the Amor account, which sounds unbelievable at first but it only confirms what my mentor already told me long time ago - that there's only one correct way to trade the FX market. Which means that you can invent whatever you want but you'll either arrive at a similar place profit wise (if it's a correct way) or you're simply going to blow up.
8. Rob's (my mentor's) death. A year ago I asked him "why did you get into trading". He said "it's because I wanted a life full of stress and sleepless nights". He died early (at age 58) due to cancer. It happened in July this year. He was semi-retired for the last few years but didn't really get to enjoy his retirement, which is sad. In his twenties he was actually a musician - what if cancer was a manifestation of his unfulfilled higher desires? An early invitation to reincarnate and try to fulfil those desires again? Of course, since trading was his main activity, it made me question myself. What if, if I follow his path for the next 25-30 years, the same will happen for me? What's the point then? What if this was a sign - a great blessing from God? And my own health was actually going down. In September I ended up at an emergency room in a hospital. I thought I was having a pre-stroke condition due to stress in trading. Very weird things were happening in my head. They fixed me up and assured me it wasn't what I thought. But that was another sign which I ignored at the time (because dedication to my craft is my #1 priority). I'm a Gemini and I love drama, change and the up-and-downs. If there's no drama in my life I just have to create it. Sadly my soulmate is a regular victim of that... But I'm starting to think that maybe I (finally) had enough of it. Maybe if I pursuit something more meaningful I won't need to stir up the drama by myself anymore. Because there will be plenty on the outside already.
So I'm thinking about going back to creativity. Web development, photography, cinematography. It's the things that I did before and it brought me a lot of fulfilment. I have some life long dreams about what I'd love to achieve in the Fine Art world and I know that trading could still help with that (financially). But my approach of "trading first, then art" should be discontinued. Because if I wait until I retire from trading before pursuing my deeper dreams - what if I die first, like my mentor did? What's the point then? So I should accept a more holistic approach. If trading can help with fulfilment of my dreams - that's fine, but if it just doesn't stick with me then I should not ignore other possible ways. My idea is to take a break and then if I still like the idea, get back to trading in a very passive, secondary, low time effort way with 80-100% privacy to allow for focus and peace of mind.
Thank you for reading. Have a great day.
