Everyone wants to be a daytrader. Let me tell you the best days. You get in at 9:25am. You make the trade your system tells you to make at 9:30. And by 9:45, the trade is done, profitable, and you’re done for the day: $1800 richer and happy about it. Even better are those stories of people who took $3000 off of their credit card and “18 months later I had $25,351,011.45 in the bank!!!”
The first day I decided I was going to be a fulltime daytrader, on May 18, 2001, I was so excited I couldn’t sleep at night. It was unbelievable to me how much money I was going to make.
But its all a lie to yourself. I still occasionally daytrade. And I’ve daytraded for other people. I’ve daytraded for hedge funds and for prop trading firms.
Right before I started daytrading, an old-timer who had spent 40 years in the business told me, “Don’t do it. Why do you want to be involved with those people.” But I wanted to be “those people”. I was one of them. I was a TRADER.
Don’t do it…Here’s why:
At some point you will feel suicidal. That doesn’t mean you lost all of your money. You might just be having your worst week in 2 or 3 weeks.
But for whatever reason you bought when you should’ve sold and that sent your head spinning and now you need to be talked off the ledge.
I’ve talked many people off the ledge in the past 10 years and had to be talked off a few times myself. Its not a pleasant feeling. Why do that to yourself?
– You’ll overeat.
Why not? You just put on the trade and the second you did it went against you. So you put on more and it went against you some more. So now you are staring at it and you are feeling bad. Your body needs to feel good.
Your body is very short-term in its thinking. Its saying, “you did something that made me feel bad so now I need a doughnut. I know that will balance the bad feeling so go do it. Hurry.” So you eat a doughnut.
The trade goes against you more. Screw it, you eat 5 more doughnuts. Six. Seven. I’m getting sick even writing this. Eight. Nine. And so on.
– Your eyes go bad.
Imagine you have two screens in front of you and thousands of numbers and they are all blinking and changing from green to red to green.
You’re staring at these numbers for thousands of hours over the course of years. I can’t read books close to me anymore. The letters all melt together and look like a kaleidoscope.
I have to take my glasses off to read them. Although, is that so bad? Maybe I won’t need glasses anymore eventually.
– Social life.
Do you really think that losing $500,000 of your client’s money in a day is going to make you a happy, chipper person when you go out with your friends that night.
One person told me, “play with your kids. Kids always make you happy.” What the hell? Do I really want to listen to a four year old jabber about something when I’ve got money on the line? Forget it.
– Blood pressure.
When I have a trade go against me, I can sit there and feel the blood pumping through my entire body. I can feel my heartbeat.
That might seem like a superpower but it isn’t. If you hear every single pulse going all through your body then something very bad is happening.
– Nothing productive.
My biggest regret in life is the hours I spent watching trades when I could’ve been making a website business or starting some other kind of business that could’ve actually been helpful to people. Like a doughnut store.
Who am I helping by trying to snatch a few thousand dollars out of the market every day? If anything, its like I’m trying to pick someone’s pocket – the unfortunate, overeating, suicidal, bastard on the other side of my trade.
– No career.
When you sit there and trade every day you’re not networking with friends or other professionals. You’re not learning anything new about the world or business.
Every second you sit there watching a trade you are removing yourself further and further from any notion of a career since daytrading is not a career. You are closer to being an inmate in a mental institution and not a functioning member of society that your kids can be proud of.
– Its impossible.
I know some very good daytraders. In the long run it is possible to make money daytrading. But it’s hard and it takes years to build the psychology. Every good daytrader I know suffers from all of the above.
You have to be extremely humble, have no delusions of grandeur when it comes to your market opinions, take losses as quickly as possible, and not get discouraged. Alas, in the long run, I have none of these qualities. And neither do you.
(See also, Who Really Makes Money on Wall Street!)
Want to be an Entrepreneur? Don’t Make These Mistakes
I have started 20 different businesses – some of which have sold for millions of dollars.
But I have made a lot mistakes along the way…
And I want to help you avoid them with this free report 45 Mistakes Every Entrepreneur Makes
Enter your email below and I will send you this free report right away.
By submitting your email address, you will receive a free subscription to Altucher Confidential. This daily investment newsletter delivers free independent financial forecasting and commentary along with carefully selected products and services that we think might interest you. We will not share your email address and you can unsubscribe at any time. Privacy Statement.