As a struggling day trader, how do you know if you're a closet swing trader?
When I sold my e-commerce software startup CoreCommerce in December 2015, I was already studying and preparing for a full time trading career. We competed with Shopify (NYSE:SHOP) and BigCommerce (NASDAQ: BIGC) and were much smaller and struggling to compete head to head. We were very profitable but every day -- a slow grind. We had been through hell and weathered the storm of multiple lawsuits, business partners gone bad & hackers from Vietnam and more -- I was ready for a change. Family was asking “what’s next” and I was very vague with my answers because I didn’t want any naysayers in my ear telling me I can’t do it. Most people have NOTHING to do with YOUR calling in life, yet we give them a mouthpiece to speak into our life and influence our decisions. Don’t allow that.!!!
I had already purchased some online trading courses and had been studying and practicing for months when a group of Nashville investors offered to buy my software company. You want to pay me to take my headache away? Yes please!!
I was dreaming of traveling the world and day trading from my laptop, sipping my morning tea while in a Greek villa overlooking the Mediterranean -- most of you know that is the fantasy most stock trading education companies sell you. Don’t get me wrong, it can absolutely happen, but it isn’t a “by next Tuesday” kind of thing. Most traders quit when times get tough, but NOT YOU -- you keep going, the market humbles you frequently and you have BIG RED LOSING P/L -- day after day, it’s so bad it’s dripping red paint on your nice clean floor.
The number one thing you can do when tough times come is DON’T QUIT. You learn, you study, you adapt, you keep going, that’s how you get better. You plant your money tree with a few seeds and it’s a slow process, most people try to rush it. Most people dig up their seeds because the process isn’t going according to their unrealistic timeline, resetting the process back to zero and the cycle continues. Not you -- you push yourself, you test your limits, you see what you are capable of, you know NO boundaries, you have limitless beliefs.
Which by the way, how do you know if you are pushing yourself hard enough? I have passed out 3 times from the stress of being an entrepreneur -- so I can handle the pain, I can take the heat, don’t worry about me, I will make it across the finish line one way or another, I am a Real Life Trader!!
My first year, I started my super-green, eager-to-learn, not-sure-what-I-was-doing trading journey with a $300,000 margin account. I was EXCITED! I debated how much detail I should share here but that kind of horsepower was intraday 4x buying power of $1,200,000 and overnight 2x of $600,000. I would be unstoppable -- I would be doubling my accounts every few months and…..BOOM....the market punched me in the face so many times -- over and over -- relentlessly -- that fantasy was crushed within months. :(
Most traders I know wish they had BIGGER accounts when they start, but take it from me, the absolute best way to learn this trading game is for BOTH your skill and your accounts to grow at the same time. Trust me on this, don’t get ahead of yourself. You do NOT want a big account when you first start out and proceed to lose a large chunk like I did. Also, traders with LOTS of experience don’t want to trade small accounts either, you want them to be “proportional” -- equal in size. That’s why none of us are managing billions of dollars, our skill isn’t there just yet. Soon though, right?
Before finding RLT, I was unaware of this “risk management” thing that within the first year I had lost close to $50,000 (yep 2 PDT accounts). We may make it look easy, trading, now, click a few buttons, make thousands of dollars a day, but that’s after years of pain and learning what not to do. I often joke that my superpower is that I’m really good at learning what NOT to do. I figure out what not to do -- make all the mistakes -- then I’m closer to what I should be doing, which is usually the opposite of what I did before. It’s pretty simply actually. Do it wrong, then do it right. Bingo! Make sense?
Within a year or so with RLT, I was consistently profitable with swing trades and would then proceed to lose my R’s day trading -- again my superpower at work -- so it was an easy fix, stop or slow day trading. But that was my dream -- how can I give that up?? Looking back on my trading journey, I know that I really just wanted to trade stocks and make money, I had put the limitation that “I have to make money and it has to be via day trading”. Most of you chose day trading because you think it’s the quickest way to profit or you think that it’s the best way to grow a small account or you are afraid of this terrible, frightening, scary, can’t-deal-with thing called “overnight risk”. Folks, overnight risk is a risk just like economic news (intraday risk) or presidential tweets (intraday risk) moving the market one way or another. Don’t be afraid of it, it can work against you -- as well as work in your favor.
A light went off -- why not just swing trade only? It fits my personality better, I was the CEO of that software company for 14 years and spent 60 hours a week in front of a computer screen and did NOT want to have to babysit my open trades “day trading”, that was the last thing I wanted to do. Financial freedom means doing what you want -- spending time how you want. Sure, if I chose to do that -- that’s fine, but I don’t want to “have” to do it.
I have a confession, “my name is Matt DeLong and I am a closet swing trader”. I didn’t realize it for several years. Are you a closet swing trader? Do any of my stories resonate with you? Does it hit close to home? Are you a day trader that struggles to be profitable, even after several years? Are you someone that wants to make money in the stock market but feels day trading is the best way to do that and haven’t really considered swing trading?
What I will tell you from going through the process is this -- #1, where you are GOING is more important than where you are NOW. Why? The trading account may be small now, but as you study, learn, back trade, make mistakes and eventually IMPROVE, those small accounts will be bigger, actually MUCH BIGGER. Do you believe that? If you quit now, you will end up right where you started and you were so desperate to get to this point. As my friend Jesse Itzler says, “you didn’t come this far, just to come this far”. #2, You are capable of FAR MORE than you realize. Some of you guys believe in ghosts but don’t believe in yourself, think about that!!! We can help fix that -- it doesn’t have to stay that way. We are launching "Real Life Transformation" (stay tuned for details) in a few months to help you physically and mentally, because trading is a tough sport to learn. It appears deceptively easy on the outside looking in -- anyone with more than a year or so of experience can tell you, there is a STEEP learning curve, assuming you don’t blow up your account and you don’t quit. It's far more mental and emotional than new traders realize. If you got a strong mental and emotional game, I like those odds.
Now what -- closet swing trader? Starting October 23 2020, I will be hosting Q&A “office hours” and taking over the RLT afternoon trading room on Fridays to have more time with our RLT traders to guide, coach, mentor and share my strategies. The market and life have beat me down more times than I can remember, but I always get up and keep going and you should too!
A few months ago, I took David Goggins advice and made a “cookie jar” of things I’ve accomplished in my life that I’m proud of -- think fortune cookies with your proud memories. This is a small list of things I can pull out and look at and remember when I’m discouraged. One of those things is helping grow this amazing Real Life Trading community!!
Trading does NOT have to be hard, it doesn’t have to be a slow grind, it doesn't have to be stressful, it doesn’t have to be the way it is now, things can change, things can improve. I’ll see you guys on Slack and in the afternoon trading rooms. If you are NOT a RLT afternoon room subscriber, we offer a FREE 14-day trial, choose the #2 option. Talk soon.