This was one of the best reads I have come upon in a long-long time. I hope you not only enjoy this, you learn from this. I myself have had a similar situation, not the same, but similar. NamastĂŠ đ~The Dinarian
Some of you are already aware, but I got absolutely destroyed during the Covid drop in March 2020.
Iâm going to be incredibly transparent, and hopefully that helps someone here today. But first, you need to understand context:
I started trading crypto in November of 2017. Due to the bullmarket-mania, I immediately managed to 5x my account in the span of a few weeks, but I did not take any profit at all, so I ended up being down -90% of my initial within the following months. 2018 was brutal for me, but I got hooked by crypto, and markets in generalâI saw the potential, so I kept at it, stared at the screens for 12-16hrs a day on average. Crypto trading was no longer just a hobby, or a passionâit was my life. I dedicated everything to trading. The 15minute chart was my best friend, and there were times where I took over 100 trades in a day.
Most importantly, my dedication paid off. I was massively profitable. I managed to grind my account up 6x my initial investment heading into March 2020 and as a result, my ego was inflated beyond belief. Even if I had someone in my ear telling me that the way I was trading would lead to my inevitable demise, I wouldnât have heard itâmoney talks louder than game-theory or market philosophy. I was also ~19 years old at the peak of my success, so I was trading with 99% of my networth because the generic advice that every adult role model had given me was "you're young, take lots of risks", and I took that to heart.
Remember this is pre-USDT perpetual popularization, so everything I traded was inverse perpetualâmeaning everytime I was long, I was long >100% of my networth, because I was also held a spot position in the underlying asset.
Leading up to the capitulation event, the plan was to sell $10k Bitcoin, then buyback ~$8k, and hold my generational entries throughout a full-fledged bull market.
> enter Covid fears
Within following days, I managed to find myself largely underwater, and because of my performance leading up into this, not only was I uncomfortable/unfamiliar with the concept of being heavily underwater, I was also overly-confident. I convinved myself that no action was necessary; the market would surely prove me right the same way it did every other time. I lulled myself into a state of complacency, and full-blown paralysis. I simply did not know what to do, so doing nothing felt easiest. Ofcourse, this complacency, fueled by my ego, is what led to my inevitable demise. I do not blame Covid.
If my humbling did not occur in March 2020, it wouldâve simply been prolonged to a later date; the end result was pre-ordained. I found myself down -80% my entire portfolio amount (which was my entire networth) within the span of a week.
Some of my portfolio was liquidated; some was just drawdown, as I had spot sitting in hot/cold wallets in addition to what was on exchanges. Overall, -80% in a week, fully eradicating all the gains I had made the past 2 years. All the countless hours I had put into studying and trading markets gone to waste. I was right back where I started.
I remember feeling hopeless and lost. I could not bring myself to eatâI had no appetite, I didnât get out of bed, I stopped responding to calls/texts from friends or family. I was a corpse-like version of myself. After some days, my father came to check on meâhe found me sulking in my bedroom: âWhatâs going on with you?â. After some encouragement, I was finally able to talk to him about all that had happened.
In order to fully appreciate his response, you need to understand more contextâmy dadâs background:
He was an immigrant, serial-entrepreneur all his life. He started with absolutely nothing, and throughout the course of his ventures, had several businesses: some successful, most failures. Heading into the 2008 financial crisis, he and my mother managed to build up two massively successful businesses, valued at mid-7figures.
Prior to this, my family and I were piss-poor; I have distinct memories of washing and reusing paper plates, and, at times, having cheese and crackers for dinner.
With these two businesses, my parents had finally 'made it', except they made some terrible financial decisions just before the financial crisis. The ripple effects of 2008 weighed in over time, and about 5-6 years later, they lost everything.
We were homeless for the next 2 weeks.
Now the societal norm is that the man is the breadwinner of the house (not trying to be misogynistic here, but this is the mentality of most immigrant families, in my experience). My father had gone from piss-poor, to multi-millionaire, to homeless. I can only imagine what kind of mindset he was in, which is why his response meant so much...
When he saw a lifeless embodiment of his son upset over his trading portfolio, he looked me in the eyes and said:
âYouâre crying over money?â,
He followed up with an ultimatum:
âIâm going to give you 2 options:
1) Stop crying over money, or
2) Stop tradingâ
âPick one.â
I remember the shockâthe chills it sent down my spine hearing him say this. From a third-parties' standpoint, he understood the âback against the wallâ scenario I was in; furthermore, he had experienced it, several times, and to a degree that I could not even fathom at the time.
If he was able to say this, looking straight into my eyes, surely there had to be some truth to it. I quickly realized he was right. I needed to make a decision; either stop trading or stop crying about money. Quitting trading felt like I was throwing away all the invaluable experience I had gained the past few years. Ironically, deciding to continue participating in the hardest sport in the world was the path that provided the least amount of friction for me, considering I had put all my eggs in this basketâdidn't know what I wanted to do with my life; didn't go to college or have a backup plan.
Trading was all I knew, and it was all I was good at.
It was now a matter of reshaping my approachâI had to find a style of trading, a philosophy, concepts, principles, that would embody the inability to cry about money. I then had to make sure my execution reflected those principles, 100% of the time; I realized that no matter my performance, 99% discipline was not good enoughâit only took 1 bad trade over the course of 2.5 years for me to essentially lose everything. I had experienced large gains. I knew what it was like to hold large positions in unrealized profit. I knew what it was like to lose it all. Pressing the buttons at this point felt natural to meâI just needed to rethink my strategy.
It wasnât easy, and I ran into new hurdles that had to be overcome shortly afterwards. Admittedly, in the weeks that followed the bottom, I found myself revenge-shorting. Thankfully, I was able to quickly snap out of this mindset. I had a good circle of people around me that helped me recognize what I was doing, and that aided in refining my new approach to markets.
When you hear things like your uncle, who hates crypto, telling you that he bought Bitcoin at $4,000 âjust becauseâ, and knowing that you couldnât even weigh the option of buying the capitulation even if you wanted to, because you were the capitulation. Safe to say that crushes any ounce of self-esteem that you have. My main priority became ensuring that I could never feel that way again.
Getting liquidated was no longer an option, nor was experiencing outrageous drawdown. I needed to be fluid. I needed to find balance, and peace in the market. I needed to understand and apply proper risk management. I needed to be consistent. I needed to have full control over the things that I have control over. And above all, I needed to never cry about money.
I am happy to say that Iâve never felt that way since then.
It is unfortunate that it often takes us being at rock-bottom, in order to find a way upwards; because at that point, thatâs the only direction to go.
"You only learn from your failures"
Ironically, the thing that I deemed âthe worst thing to ever happen to meâ at the time, ended up being the best thing that ever happened to me. Iâve recently been able to retire my parents, thanks to trading...to markets. The hard work, countless hours, anxiety, getting wicked out of trades at the lows, slippage on illiquid moves, drawdown, missed opportunities, criticism along the way⌠it was all worth it.
I've since realized that the only thing that truly matters is execution. The market is synonymous with variance, and therefore, there is no tried-and-true system or strategy that can be repeated to infinity to guarantee successâatleast not for a discretionary trader. There is only how you execute based on your discretion.
My philosophy now is: there is no market movement that is 'unforeseeable'; there is no way for the market to 'catch us off-guard'. There is only word-vomit, and deflection, to find reasons as to why we did not execute the way we think we should in our heads. Every market movement is inherently 'normal'âbecause it's the market, and the market is never wrong. The periods where variance is largely pronounced are merely considered 'White Swans'.
I hope that you've found this article enlightening, and if you have a retweet/share is appreciated.
More than anything, I hope that you lose the ability to "cry about money".
Much love, and Goodluck.
Original post: https://x.com/TraderMercury/status/1886591383844126918
