How Does It End? – Churning and Burning

Couple months ago, I found myself trading with a disrespectful level of disinterest. Win some, lose some, ultimately go nowhere and tread water. No dedication to improving anything about my current form of (deeply-flawed) discretionary trading. I’d get bored and try to fight my way out of small losses by doubling down and trying to scalp out of it–dumb mini-martingale bullshit like that. Sometimes it worked, sometimes it didn’t but it wasn’t really costing me.

Deep down, I knew I was cooked on the inside.

I would ask myself that every single day. What am I even doing? There is no purpose, no love, and no respect for this game.

I should just stop. Quit for a bit and re-evaluate. Unfortunately, we can’t always be level-headed. I kept trading, as if to punish myself subconsciously… not really making any money but also not losing it either.

So then one week around the middle of May, all the meme stocks exploded again. For the record–I have never traded these stocks well on the whole. I think GME might be a bottom-5 all time stock for me. I won’t bore you with the bullshit behind why GME shot up, I’m sure you kept up–whether willingly or unwillingly. Personally I am sick of the whole story and whoever is involved and it would be too soon to never to have to hear about whats-his-face and all his positions ever again.

It’s a sleepy Monday and I’m just shorting GME pre-market in the high 20’s and then I get blown up as it goes parabolic early on. I am completely exposed as a fraud who has no real plan. I lose about $80,000. I ask myself why that even happened… I don’t trade like that. Must be some deeply repressed tilt that I’m holding over from 3 years ago when all that shit started. It hurts but it represents a single digit drawdown from my year-to-date gains. Maybe that’s my out. I get to stop punishing myself and it only cost me $80,000. A worse version of me could’ve added a zero to that figure. That’s the dark side of discretionary trading when you start to lose control over yourself.

I tell my wife I won’t trade tomorrow. Or the rest of the year. It’s over, it’s done. Trading sucks and I hate it. Enough with this nonsense. The negative feelings that had been simmering a month prior had now completely boiled over the pot. I’m disgusted, no way I’m trading again.

Bell rings, I’m at my screen. I’m short a few thousand shares.

A real-time hours trading day lasts 6 hours and 30 minutes. It felt like 100 hours because every single second at my screen I wanted to slit my wrists and end myself. I couldn’t wait for it to be over. PnL goes up and down and I can only numb myself to all my negative thoughts. I end the day up $50,000. Well… now I’m within a reasonable amount of breaking even. Might as well keep going I guess–GODDAMNIT.

Now it’s Wednesday and I make another $20,000. Still feel horrible about everything. Now I should definitely quit. Making back 87% of the drawdown and actually breaking even, it’s honestly a negligible difference. Just pat yourself on the back for mitigating the loss and leave.

NO. I’m so close. I have to try to turn it into green and make all this pain worth it. I’m sick in the head and can’t make up my mind. On Thursday, I start trading this FFIE. I used to have incredible results when trading stocks that go from sub $1 to $2-5 range. Maybe I can find that magic again on this little junker.

Big mistake. I lose $70,000. I’m back to being down $80,000 on the week again. I’m sure all of my readers are thinking UH OH. DANGER ZONE.

Well what happened was all the raging emotions suddenly became quiet and the next course of action became obvious.

IPhone–stock apps–swipe–DELETE.

Broker website–chat support–wire request–“all of my money.”

Are you sure Pete, we’d hate to see you go.

Yes I’m sure, give me my money you leeches.

$80,000 was my price to get out on Monday. It was my price to get out on Thursday. Worth it.

As far as my interest and blogging/writing? Right out the window. Why do I want to write about trading when I absolutely fucking hate it?

And now I’m here–one month later–in purgatory. That might be the last time I ever trade. It’s painful even writing all of this. I thought I hit my rock bottom last year. Then this year started out great (still great, all things considering) and I’m still here? It doesn’t makes sense. Trading is just depressing for me and it’s been too complicated to flesh out why exactly. Believe me, I’ve tried–there’s been four rough drafts before this. One of the challenges is that I feel my own feelings aren’t even valid. Like–things are still too good for me to be writing all this and complaining and such. That’s that annoying counterthought that I can’t quite respond to. I wonder if you’re thinking the same thing. This weak ass bum just can’t take the heat anymore. Maybe you’re correct.

How is it supposed to end?

Look, most of you reading this may not be able to relate to this yet. You’re in all likelihood, a beginning trader or a long-time marginal trader just trying to make day trading a sustainable career. You’re thinking of how to get it started, not ending it. Or if you’re actually a profitable trader, you just want to keep it going. You don’t hate it…yet.

Sometimes I think of how it is supposed to end. I think of some of the stories I heard. In Stopping Out, I wrote about Franklin Chase–an early 2000s big shot trader who took a massive drawdown, then recovered, then decided to never trade again. He didn’t feel in control of risk anymore.

The guy who told me that story, Hanzo, was also a big deal. He was the #1 trader at Heartland Securities at one point and now he’s a community college professor. The stress of constantly fading the market was just too much and he didn’t have the drive to figure out another way to trade. He does seems happy with his job now. He feels he’s truly giving back rather than just taking for himself.

Then there’s this old school guy at Trillium. I don’t know him, I just know his story. He’s one of all their all-time best traders with $75 million in lifetime earnings and he’s the mentor to a highly visible and prominent ex-Trillium trader. One day he just lights $15 million on fire by getting long XIV during the 2018 VIX meltdown. Just took on a fundamentally wrong trade where he didn’t understand what he’s going on and he probably made it worse at some point by adding. Then after that, he quits. Bye bye. At least he only lost the firm’s money and presumably kept his previous fortune. Who knows if he still trades or not, or if he can ever trade the same as he did before.

Does it have to be that way? We just trade and trade and trade until an unhappy ending and then that’s it? Is it ok to just have a financial goal, meet it, retire on top, and do something else? What if I don’t have that *something else* that drives me like trading once did? Am I now just a stay-at-home dad making sandwiches and watching Netflix? Maybe that’s ok too, I don’t know.

Anyway, that’s where I am. Not a great place in one aspect of my life that was once very important to me and not-so-important anymore. Good place in the more important ones. Best wishes to all my readers and sorry if I’m not writing that much or responding on time to e-mails or DMs–my mind is just anywhere but trading at the moment.