I sabotaged myself for a decade. Some people will do it their whole life. Ultimately, it’s your choice. But the clock is ticking. I don’t know for you, but I don’t want to have any regrets on my deathbed.
I survived one bear market. Many bull markets. And one ranging market.
Trading is a vehicle for a better life.
I worked with more than 75 traders. Self-sabotage is one of the most common behaviors.
I’ve seen that pattern too many times.
From me.
From others.
It never ends well. Never.
Before continuing to read these few words, take a moment to really think about the following questions.
Have you ever met a perma-bear who is rich off his trading?
Have you ever met someone stubborn who is rich off his trading?
It’s far deeper than a simple yes or no (the answer is obviously no btw).
If you’re a perma bear, grab some APEX at 80% off with the code GVXZJABB.
If you understand simple mathematics, you’ll agree that a 75%/25% long-to-short ratio in most market regimes (90%+ of the time!) is required to give yourself better chances.
However, many believe they are the chosen ones and can spend the next 20 years shorting the strongest market in the world every single day (lol). I was one of them.
For every 1 rotation down, we have 1.2 rotations up. It compounds, making each trade easier on the long side, from your 100-tick chart to your daily chart.
I’m an actuary, and it took me 10 years to apply it, and 12 to fully understand it (sigh).
Right now, you have two options:
Option 1: Spend 1 hour a day looking for a 20/25pts long scalp and come back fresh the next day, win or lose; or
Option 2: Spend the whole day fighting the market to get that short window of weakness (that might not even happen), while hoping to not lose your mind in the middle, ever, over a 20-year career.
Wait. Don’t tell me your answer yet.
First, have a look at this monthly NQ chart.
Now tell me. Which option is easier?
You can disagree with me all you want, I couldn’t care less. I wasted 10 years of my life being a perma-bear. 10 fucking years. Luckily, I’m still in my early 30s.
And I won’t even talk about the opportunity cost of focusing on the short side most of your time.
I promise you, your (mental) capital will thank you.
But what do I know?
Now, let’s discuss about the second question.
Why do we dig ourselves into the deepest and most uncomfortable holes, consistently? Why do we seek such pain?
I had my fair share of dark dark times.
Overwhelmed at work. Anxious. Poor physical shape. Addiction mentality. I couldn’t see the end of the tunnel, but the love of the game made me go through these 10 years of pain. I can’t explain why.
But Freud can.
Sigmund Freud was a famous psychologist who thought a lot about why people feel and act the way they do. One of his ideas is about something he called the "death drive," but it sounds scarier than it is.
Freud believed that deep down, people have two main types of instincts or drives.
One is the "life drive", which is all about surviving, having fun, making friends, and loving others. This is also called "Eros," after the Greek god of love.
The other one is the "death drive", which Freud called "Thanatos," after the Greek god of death. It's a bit weird, but he thought that alongside our desire to live and be happy, there's also a part of us that leans towards chaos, destruction, or even hurting ourselves. It's not about actually wanting to die but more about a struggle inside us between wanting to grow and wanting to give up when things get tough.
Freud believed these drives are in a constant battle inside us, shaping how we act and how we deal with problems. So, when you're feeling down or acting out, Freud would say it's just your life and death drives trying to figure things out inside you. It's like having an angel on one shoulder and a little devil on the other, each whispering in your ear what to do.
Now, life's pretty awesome. My marriage is strong, my family is fine, my friends are great, I'm healthy, I learned to say NO to others, and trading's going well.
So, why do I still try to mess things up even when it's all good? I thought once I got good at trading, I wouldn't have this problem.
Turns out, I was wrong. Fighting these urges is (and will always be) my biggest daily challenge. Don’t get me wrong, it gets much better and easier over the years. But it’s still there. Waiting for you to get too cocky (or not enough).
I've worked so hard to keep my life on track. I can't just let things slide.
You need to be skilled, but you also need a strong mind. If you don't have both, you won't make it.
So, what makes us lose it? It can be thinking you're not good enough or trading when you shouldn't. Or always expecting the worst, or not listening to what your body and mind need.
What happens then? You make trades that don't make sense and lose a lot. It can take days, weeks, or even months to make back what you lost. And it all starts with something small.
It feels awful. You promise yourself you'll never do it again.
For a few, that promise sticks.
For most of us though, the problem comes back. And it gets worse if you start thinking it's no big deal. Then, losing a lot doesn't even bother you much. "Just another bad day," you might say.
I've been there, but not anymore. However, I know that the urge is still nearby. The trick is finding the balance between being confident and being careful.
Writing helps me avoid making bad choices.
To avoid messing up, I trade less, spend less time looking at screens, and reduce my risk. Too much risk makes me anxious before I even start. Too much screen time makes me lose focus. Trading too much makes me forget how to do it right.
I never mess up just after 30 minutes of looking at charts. It always happens after hours.
But if I stop early, I'm fine. I don't mind ending a day with a loss because I know I'll make it up later. What I can't handle is making a huge mistake that wipes out half my account.
How to avoid self-sabotage?
Here’s my solution:
When the VIX is sub 15, limit your time to 1 hour a day. Give it your 200%. No phone/wife/kids/distraction/work meeting. You and the candles (non time-based, plz). Nothing else.
Stay away from the screen during every orange/red folder news.
Learned how to consistently capture a good chunk of each rotation that you trade.
Observe the pace of the market before placing your first trade.
Stop looking for answers/reasons. Just trade. That’s your goddamn job.
Always listen to your guts.
Find inner peace.
But first, take a 2-month break. Prove yourself that you’re stronger than your demons. Then, come back.
Overall, I’m not a great trader, but I’m good at managing myself.
PS: Perma-bear might not have a lot of $, but they do have a lot of followers. It’s a fair trade-off, and I’m glad that they at least have something to feed their gigantic ego.
PPS2: I wrote this article a couple of weeks ago, and I think it’s funny timing to publish it now.
It seems to me that most traders/investors are always looking to be buyers. With the markets going up much more than they are going down, how come most of these traders/investors lose money? Most retail traders never short the markets. You would think that 80% are making profits and growing wealth. Instead it's the opposite. Yes, I suffered much in the early going with being too bearish. It's a natural thing that needs much energy and persistence to overcome.
The easy way to become a billionaire is to always buy at the bottom and sell at the top. How hard can it be?
Great article. Nice mention of Freud concepts.