I have seen day traders turn thousand dollars into millions of dollars really fast.
But for some reason, most of these trading gurus end up using their fame to sell thousands of dollars’ worth of courses.
But if they are so good at trading, why did they stop at making only a few million?
If they can turn $1,000 into 10 million really fast, why not keep going until 1 billion dollars?
It feels like something’s off.
Like, there is a lie in there somewhere.
Take Famous Day Trader A, for example.
Who turned 5000 dollars into half a million dollars fast, then bragged about how good he is, but then suddenly disappeared.
Makes me worry a little.
Then there is the famous trader B.
He turned a few thousand dollars into 3 million really quickly.
But for some reason, has not repeated his success in more than 10 years.
But then there’s famous trader C.
He also turned a few hundred dollars into 10 million quickly.
But then, why are his profits so disappointing now?
Why is he not repeating his old strategy that turned a few hundred into 10 million?
It’s almost like most day traders get lucky, and then sell courses, because they simply can’t repeat their success.
But if you can’t make billions from trading, then how much can you actually make?
I mean, what are we even doing with our hard-earned money?
Well, I have been trading for around 10 years now, and if my beginner self had listened to this video, he would have been quite disappointed.
Because I’m definitely not trading how my beginner self imagined.
You see, when I started trading, I was given an Excel sheet.
It had profit goals for each month and year… to achieve my dreams.
I was told to follow this monthly profit and see how quickly I will make millions of dollars.
This Excel sheet had profit goals of like 30% in a month.
But in the beginner days, this was pretty easy, well, because I was making like 30% profit in a day many times.
I was gunning for Warren Buffett with my $10 dollars account.
I’m not even joking.
I started trading with the minimum account the broker allowed, which was 10 dollars.
And I was doubling it really fast too.
Because of that, I even managed to stick to these Excel sheet goals for a while.
Not exactly, of course. Sometimes doing slightly better and sometimes worse. But overall, close enough.
I felt like these famous trading gurus who turned a small account into something really big.
I was finally on the right path!
But then, something strange started happening.
I couldn’t repeat my small account success after increasing the account size.
Turns out that the only reason I managed to make high profits initially was that I was risking big on each trade.
At the beginner stage, I had little to no concept of money management.
When I learned that we should risk low on each trade to avoid blowing up the account, I was not able to achieve my high profit goals easily ever again.
Then I realized something important. The reason why there were so many famous day trading gurus who turned a small account into millions of dollars.
You see, when you are a beginner with a small account, you can afford to take big stupid risks because it’s still a small amount, something you will make easily if lost.
When these famous day traders won more with high risk, the small amount turned into millions.
But why did many stop only at a few million?
Why didn’t they continue making profits till 100 million or even 1 billion?
Well, the famous traders who got lucky gave back all their millions just as fast.
But the ones who actually had a working strategy but bad money management had a bigger problem to face.
You see, the one thing these famous day traders have in common is that they trade extremely small timeframes.
These small timeframes require you to take big position sizes if you want to make good money fast.
And for a while, I used to trade on the smaller timeframes too.
I used to enter a trade, catch a big move if it happened, and then exit.
All this used to happen really quickly, within a few minutes.
I only needed to press the buy-sell button a single time.
But when my account size got bigger, I was reaching the maximum size limit of a single order.
This meant that I had to press the buy-sell button multiple times.
For a fast momentum catching strategy where I had to get in and out quickly, this was slowing things down.
But then, even worse problems started to appear.
When we take trades on smaller timeframes, our position size can get really big.
But if we use a bigger account size on top of that, the position size gets crazy big.
But to buy something in a big amount, you need a seller to sell you a big amount.
But many times, there were not enough big sellers at my entry price.
In other words, there was not enough volume at my entry price.
So when I pressed buy, I had to wait multiple minutes to get my order filled at a specific price.
This made entering trades really slow, and not good for a fast momentum catching strategy.
This basically meant that the strategy that grew my account really fast before would not work anymore.
The account size has become too big for it.
So, I realized that every trading style has an account size limit.
I was day trading using stock and index options during this time, where the volume is already low, and it’s quite easy to reach the maximum limits.
If I wanted to, I could just trade normal stocks or even forex for higher volume.
But I had found a working strategy that was actually growing the account fast. And now, I could not trade it easily simply because the account size got too big.
I realized that many day traders can’t keep on making high profits forever, because their account size will simply outgrow their strategy’s limits.
But that kind of sounds pathetic, doesn’t it?
We go through all the trouble and torture to day trade properly, but once our account size gets bigger, we can’t use the same strategies that worked before?
Well, the beginner me would have definitely found it pathetic.
The side effect of this was the high profit goal he had set in the Excel sheet.
It slowly turned from 30% profit a month to 10% profit a month, then to 5% profit, then to take whatever the market gives you.
You see, over the 10 years of actual trading, I started to understand that a fixed or consistent profit doesn’t exist in trading.
It’s a lie that trading gurus say to sell us a dream.
In reality, there are market conditions where you will easily make a lot of money.
And then there are market scenarios where you will make only a little.
Sometimes we will even make a loss.
The profit really depends on the market conditions themselves.
But at the same time, once your account size grows to something big, the new profit in amount will be actually much higher, even if the profit in percentage is now smaller.
Even a small percentage gain on this big account will be enough to live off of comfortably.
After this point, I have seen people start their own fund to grow faster in amounts.
That’s why some famous traders start begging rich strangers for money.
I personally have no interest in starting a fund, sounds boring.
But if you give me 1 billion dollars, I will happily do it for free.
But I have reached a point in my around 10 years of trading journey where I just can’t trade as I used to before.
And even though my beginner self won’t like it, I really like the smaller percentage gains, which are now relatively bigger in amounts.
Beginner me was trying to beat Warren Buffett, but current me wants to trade peacefully like Warren Buffett.