I started trading in 2017 with little to no knowledge of how the stock market functions. Like many novice investors who started trading during the rise of Robinhood and similar apps, I was excited by the potential to make money in a short amount of time; all from a simple, convenient, and free app on my phone. So, I started investing with about $1,000. I was initially drawn toward penny stocks because they were cheap and I could buy quite a bit with only $1,000. Within three weeks, I had basically lost it all. That was my first of many hard lessons.
I didn’t quit though. I invested another $1,000, but my approach was a bit more cautious this time around. I tried studying chart indicators for the first time and researched the stocks I was buying. I still focused on penny stocks because I thought they offered the best opportunity to make significant gains with minimal cash invested. I did have some good luck this time, taking my account up to around $5,000 at one point. It felt great, but I also became overconfident. Unfortunately, I learned a few more hard lessons. Never chase a stock, don’t be greedy, and know when to take a loss… I had once again lost everything.
After my second failed attempt, I stopped trading for a while and decided to practice before using real money again. I used various programs that included paper trading on Etrade, an app that paid you real money if you predicted a stock’s movement accurately, and Stockhoot to help build a portfolio and track my successful trades. The technique that I was attempting to practice with wasn’t new or innovative. I was attempting to execute day trades by using support and resistance levels; buying on the support and selling near resistance. In contrast, I would also practice short selling by buying near resistance and selling near support. To my surprise, it was a successful strategy.
In March of 2018, after practicing for several months with consistent results, I felt comfortable enough to start trading again with real money. Only this time, I was fortunate enough to have $25,000 that I had received through other investments. So not only did I have a technique that proved to be successful with months of practice, I now had the funds to use this technique because it takes $25,000 to day trade without restrictions. I was very excited and grateful for another opportunity to finally be a successful trader.
Long story short, I lost everything again within 5 months. I started off well, but I slowly fell apart due to a combination of factors, the most important being a complete lack of discipline; I traded risky stocks that were too volatile, I was greedy and didn’t take profits, I was stubborn and didn’t sell for smaller losses, and I completely abandoned my trading strategy in an attempt to recover my losses as quickly as possible. I fell into a very common trap that many traders have experienced. It was gut wrenching to say the least.
After my third failed attempt, I decided that day trading just wasn’t for me. I put my remaining funds into appropriate long-term stocks within an IRA, and left it alone. I was very disappointed and distraught over the whole experience; losing that much money was significant for me and my family. I couldn’t risk losing anything more, so I walked away from it entirely.
Around August of 2019, about a year after my last failed attempt, I started to think about trading again. Even though my previous attempts had amounted to significant losses, I couldn’t let myself quit because it had always been my dream to become a full-time trader and independently wealthy/successful. I believed in myself and I knew it was possible to be successful, I just needed to develop a better technique. More importantly, I needed to be disciplined with that technique.
I made the decision, for the fourth time, to start trading again with limited funds. I deposited $1,000 into my account and focused only on executing day trades and nothing more within the Robinhood app (this would only allow me 3 day trades within 5 trading days because my account balance under $25,000). I knew it would be a slow process with only a few trades a week, but I needed to be patient. Thankfully, everything went very well; I made around $50 every trade, sometimes $100. I was keeping it very simple and I made sure to stay disciplined.
Two months had gone by and my approach was still working. Around this time, I started to take notice of Options. Up until now, I had never attempted to trade Options. Moreover, I had no idea what they were, how they worked, etc. I did some quick research and was intrigued by the concept. Out of curiosity, I placed my first Option trade which resulted in a gain of $800. I was immediately hooked because the amount of money earned far exceeded that of what I had been earning through common stock trading. I was also surprised that you could day trade within Options.
For about the next month, I purchased Stocks and Options equally, but eventually I began to trade Options exclusively because the returns and success rate were far greater than common stock. During this time, I also continued to work on a technique that I had been studying over the past few months which focused on percentage changes within a stock’s price. I began to see consistent patterns within a few stocks that I had been watching on a daily basis, and this helped me determine an appropriate entry point into a stock which typically resulted in a quick profit; also known as scalping. This method showed promise with common stock, but it was even more successful with Options.
In December of 2019, I made the decision to take out a loan for $25,000 so that I could once again day trade without restrictions and execute my trading technique, but only with Options. My plan was modest; earn $100 every day to reach $25,000 for the year (around 252 trading days in a year). With every penny earned, I would allocate that toward my loan in order to pay it off immediately; that was my main focus for 2020. That’s also why my previous website was titled “25k250,” which stood for “$25,000 in 250 days.”
On January 1st, 2020, I began trading with the $25,000 loan with a sense of “now or never.” I knew that if I failed again and lost everything, not only would I be in debt for $25,000, but my dream would also be over. This time felt different though. I learned a lot about the stock market over the past couple of years, and I had become more patient and disciplined. I knew that If I stayed true to my technique that I would be successful, no matter how conservative I needed to be. I was not going to allow myself to fail again. What proceeded to happen was unexpected and forever changed my life.
Within 40 days, I earned $25,000.
Within 100 days, I earned $100,000.
Within 250 days, I earned $227,000.
I paid off my loan, my mortgage, my student loans, and I quit my full-time job to become a full-time trader in March of 2020. My dream is now a reality.
For those of you who have experienced similar difficulties finding success with the stock market, I hope this provides you with some hope that it’s never too late. Follow your dreams and believe in yourself, but most of all always stay disciplined. It’s a marathon, not a race.
Moving forward, my plan is to continue executing my trading technique the exact same way as I did throughout 2020. I hope you will follow me as I continue this journey and I hope you find success as well.