11 or 12 Things I Learned While Daytrading Millions of Dollars

Things I Learned While Daytrading Millions Of Dollars

I was a day trader for many years, and it almost killed me.

I made money by making profits on my own money and also taking a percentage of the profits for the people I traded for. I traded up to $40 million or $50 million a day at my peak. I did this from 2001 to 2004.

I learned about day trading but I also learned a lot about myself and what I was good at, what I was horrible at, and what I was psychotic at. Things that had nothing to do with day trading.

Day trading is the best job in the world on the days you make money. You make a trade, then maybe 20 minutes later you are out of the trade with a profit, and for the rest of the day you think about how much money you made.

It’s the worst job in the world on a bad day. I would make a trade, it would go against me, and then I wanted my heart to stop so my blood would stop thumping so loudly.

I did it for years, though, because I was unemployable in every other way.

Here’s what I learned. All of these lessons I will certainly use today, many years after I stopped day trading.

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This applies not just to trading but everything. You could be married for 10 years and the next thing you know you are divorced and you would not have predicted that.

You could be healthy all your life and drink your vegetables and exercise and reduce stress, and a year later you could be dead from cancer.

You’d have much less stress if you let go of trying to predict the future.

You can always seek to increase the odds in your favor. if I don’t jump off bridges, for instance, it’s more likely I’ll be alive a year from now. But certainly a path to unhappiness is thinking the future can be predicted and controlled.


B) Hope is not a strategy.

If you get to the point where you “hope” you don’t get ruined, then you did something wrong beforehand.

For instance, if you plan a wedding outside and you don’t have a backup plan in case it rains, then you probably mis-planned your wedding, unless you are getting married in a desert.

“Hoping” is not a bad thing. I hope that every day my life goes perfectly.

But if hoping is the only thing I’m relying on, then it means I didn’t really look at all the possible outcomes of something that was important to me.


C) Uncertainty is your best friend.

A hundred percent of opportunities in life are created because people are uncertain about almost everything in their lives.

We are constantly trying to close the enormous gap between the things we are certain about and the things we are uncertain about, and almost every invention, product, Internet service, book, whatever has been created to help us close that gap.

Sometimes this is hard. If your husband betrays and leaves you, you often feel like crawling on the floor and burning all the self-help books. They all lied.

It’s hard to feel “in the now” or to “positive think” when life feels like it’s over. I’ve tried. For me it’s too hard.

But at the very least you can say…”help me.” You can say it to your close friends. You can say it something inside of yourself.

“Help me” is the most powerful, and most forgotten, prayer.


D) Taking risks versus reducing risk. 

Some people take too many risks and they go bankrupt. This happened to me. And sometimes people are too cautious and don’t take enough risks.

When I first started day trading, I was so afraid of risk that if I had a small profit, I’d end the trade. But then I would take big losses and that would wipe out all my profits.

The key is that you can take larger and larger risks if you work on better and better ways to deal with those risks.

For instance, I might be able to risk marrying someone if I know she is not a hard-core drug addict who regularly betrays the people she is close to.

I can risk driving without a license if I always stay below the speed limit (I know this is a stupid risk, but still). Once you have a method of reducing risks, it’s easier to make trades or decisions about anything.


E) Diversification.

Often I get emails, “I really want ONE job but they don’t seem to want me and now I’m miserable. How can I get that job?”

Well…you can’t.

And you’re going to be unhappy. You can’t wish yourself a job.

When I was raising money to day trade, I probably contacted over 1,000 people. When I was starting an Internet business I started over a dozen Internet businesses and watched all of them fail but one. When I was trying to sell my Internet business I contacted over a dozen companies (although Google broke my heart – damn you Google!).

When I wanted to get married, I went on lots of dates. Claudia’s approach was even smarter – she wouldn’t waste time with dinners. She would only go to tea with guys. Within the first 20 seconds you know if you are attracted. So keep it to a tea.



F) Say “no.”

In day trading, if something is not working out, even if your heart wants it to work out, you have to say “No” and cut your losses.

If a business relationship is not working out, don’t put more energy and time into it.

There is a cognitive bias called “commitment bias.” We think because we’ve already put time and energy (or money) into something that we have to stick with it. But this is just a mental bias. Say no to it.

You have to decide every moment if this is the situation you want to be in.

Just because you were in the situation a moment ago, or yesterday, or for 10 years, doesn’t mean the situation is right for you anymore.


G) Health.

Day trading pulls everything out of you. It sucks the soul out of your body, blends it up, and then explodes. It doesn’t turn into a nice smoothie. It explodes.

So you have to take care of yourself. If you don’t sleep enough, if you don’t eat well, exercise, be around positive people, be grateful for what you have, blah blah blah, you will lose all of your money and go bankrupt.

And obviously, this applies to everything else in life. Every day, what small thing can you do to become a slightly better you?

The reason we get so attracted to “safe” cubicle jobs is that the pain is more subtle and sneaks up on us. It’s not the blender-drama of day trading so the need for health on a daily basis doesn’t seem as important. But it is.


H) Laughter. 

The only way to survive is to laugh. There’s that saying: “Man makes plans but God laughs.” Well, you might as well be on the same side as God.


I) “This is crazy” means you’re crazy.

I’ve seen it a million times. Guy makes a trade. The market goes against him. He says “this is crazy” and puts more money into the trade. And then he loses all his money and goes crazy. I’ve had to talk people off the ledge or tell them to put the gun down.

The market is never crazy. The world is never crazy. And I will go so far as to say that your girlfriend who just lied to you about where she spent the night is not crazy.

I only care about you. And you’re effin’ crazy if you thought the world was going to line up any other way than the way it lined up.

Tough on you.

I know when I feel like, “ugh, this situation is insane” that the first place I need to look is at me.

I am insane.


J) It doesn’t matter if a trade (or a day, or a life) is good or bad. 

Good and bad days happen. But life is about a billion little moments that add up to all the things around you. If you let one of those moments have too much control then you are bound to be mostly miserable.

I was mostly miserable during the period I was day trading. I let that aspect of my life take control. So I stopped focusing on being a good husband, a good father, a good friend, a good anything.

All of my other constituencies went to hell.

I would have nightmares. I would lose sleep. I would wake up many mornings and go to the church across the street so I could be by myself and pray. What would I pray? “Jesus, please make the markets go in my direction today.”

I’m Jewish. Nobody answered my prayers.


K) It’s never about the money.

Every day I get emails like, “Can you show me how to day trade?”


I know a thousand day traders and only two that won’t go bankrupt. So what makes anyone think they will have an edge? How many people listen to me?


How come?

Because people are sick of their lives, their relationships, their jobs, and all the lies that have been told to them ever since they learned how to walk.

They want freedom from the BS.

I get it.

Day trading is the dream. You can make enough money to not care. To do it from anywhere. To be happy.

It won’t work. But people don’t want to believe it. Most people think they have that one special something that will make it work for them.

And it’s true – they do have that one special something. But you can’t get there by day trading first. You can skip right to the being happy part. You can skip right to being free.

But we never learned that. We were taught we had to do something first to earn freedom. We were taught that suffering was the currency to buy happiness.

Okay, go do it. Then cry about it. Then get scared. Then curse the craziness. Then cry more. None of that will make you happy.

Then read this blog post again. Not because it will make you happy. But because I like when people read my posts.

And laugh.

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My goal is to deliver to you a fresh perspective…

Something to help you make sense of the chaos.

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  • Jim

    It’s not that God isn’t listening to you Jack it’s that you need to listen to God. That seems to be the problem usually. And being catholic doesn’t matter to God he looks only at the heart.

    • JJ

      Jim, I believe Jack was being sarcastic. Day trading with paper money or real money is an invaluable experience.

  • Hector Corona

    90% of all traders lose 100% of their money. Why do 10% make it, it is not lack of money it is Mental Preparation!!! Get prepared. Someone that has a million dollars can lose it all and someone that invests $5,000 can make a million dollars.

    • Dan Guerriero

      Boy are you right. Know the subject matter, cut loses and stay on top of News. Thanks hector

    • Larry Von


  • Tarek Lols

    not “sometimes”, letting go “always” gives us freedom, and freedom is the only condition for happiness.

  • Bobby Wallace

    Your article could be considered “funny” were it not so true…especially “F Say No”. It took me a long time to learn this life lesson but now ” I get it”. Thanks for sharing!

  • volk

    So, it’s better to buy a wonderful company at a fair price than day trade

  • Alex

    The thing is, it takes most people at least 5 years or 10,000 hours to become experienced at something. It took me 3.5 years and $45K of my own money to become a profitable trader. Trading stocks is probably the hardest way to go about it since there is so much insider trading and other illegal activities going on within equities. I stick to the futures. It is possible, but most people can’t do it mainly because they don’t have the discipline, patience, desire or just aren’t smart enough to figure out a strategy that works for them. Either you are going to profit nicely or lose all your money doing it though. This is just my opinion.

  • JJ

    You know why most day traders lose money? Because of greed. Bulls will run, bears will hibernate, but the pigs always get slaughtered. The first rule of day trading is to set a goal and stop there. People always wish it would double or triple, then end up falling in love with the stock. That’s the biggest mistake you can make. I day trade, and I have lost money at first. My second step was losing my money “professionally”. After I had a little epiphany, I began trading with caution, and became a champ.

    • shiri

      hey JJ, I recently got into daytrading and am trying different strategies (not successfully). however, i’m determined to succeed. can u share a bit about your success strategy? :) My fb name is “shiri sagi” (from university of Haifa). I will be forever grateful :)

      • manudutta

        jj is true market is neutral.. most traders lose money coz of they don’t want lose money, but loosing money is the part of game . im telling u simple thing most new trader do buy @100sell @102 profit = 2
        next trade buy @100 now stock dowd they don’t sell they wait till 97,96,95,94 after that sell at @ 92 loss = 8 loss
        means small profit big loss …

  • Tony

    Thanks man, exactly the words I needed now. :)
    Today I lost a whole lot of cash while trading and got really down, these words were really cool and really helped me get my chin up and be grateful for a whole lot of things in life, and realise I need to keep reading, studying and keep trading and keep living my life as it is great and beautiful.
    Thanks again and may your words inspire much more people as they did to me.

  • af


  • Paul

    I daytrade every day….I have done this for 14 years since I was 18 years old. … in the first 8-9 years I went crazy like the above author…however, in the last 5+ years, I have taken 25,000 of my saved money up to over $220,000, and I am very confident that I will make it over $1 million in the next 2 or 3 years….. there is a way to make money consistently by day trading…. You have to keep working on your strategy, reduce risk, use your mind and not your heart, act based on what you see, and not what you believe or hope in you heart…. never hold anything over night if possible…… I have a very specific system and tools I use, and anyone who is interested – please contact me: phoppfw@gmail.com

    • Ronel

      I really wanted to hear someone say this! You are the 10% that made it! Yes, it takes 8 to 10 years of burn, cry, roll into fetal position on the carpet next to my computer! But NOT giving up on learning how to do it! I am in year 7 and getting there. Awesome advice and very close to what I have also learned.

      • DK

        It’s other people’s success that drives us, so it’s quite inspiring to see someone who has made it after many years of hardship. I am also in year 7 and would love to day trade as a job.

  • The Dude

    Here’s a mini guide for succeeding.. Have nerves of steel. Don’t invest in something ridiculous. Be OK with losing it all (which, by the way, is almost impossible unless you make basically horrible trade after horrible trade after horrible trade.) And it helps if you only use 2x margin, so you can turn your day trade into a swing trade if you need to hold it a couple days without getting a margin call. So try not to invest 4x DTBP (Day Trading Buying Power). 2x is fine.

    Set up a goal. If you want $1,000,000 within a year and you only have $5,000, then know what you need to do to make it happen. Visualize it and do it. Know that in that scenario you’d need to have gains equal to 56% of your money every month. And how can you make 56% of your money in a month? Well there’s a number of ways. You could do one trade that made 56% profit. Pretty unlikely. You could use 2x margin and make 8 trades a month that each gain 3%. A lot more likely.

    Stocks go up. Remember that. They either go out of business or they go up eventually. If it’s going out of business then what the heII made you think you could hold it long? And if it’s going up eventually then why the hell would you short it? DON’T short stocks. Ever. Now SOMEONE has to short stocks, because it’s healthy for the market, it’s healthy for us. But this is a mini guide to success. And not every one will read this, so for the few who do read this, just take the advice and you will be better off. and if you see someone who does short stocks, let them short them. Bulls money comes from some where, and through a chain of events it’s usually from bears, or from the consequences of bears reactions. Just about every trader I know who is always bullish, is way more successful than every trader I know who is usually bearish.

    Your money comes from somewhere. Every one can’t win. Well….they could but…I’m not getting into that because that’d be a much longer response here. But typically… If there’s only 10 people in the market and 5 of them had a combined profit of 5 million. The other 5 probably had a combined loss of 5 million. Just throw that nugget in the back of your mind and it will help from time to time, especially when you’re reading responses/ideas from people on trading sites.

    It helps if you’re stubborn. It’s ok to want to win every single time. You SHOULD win every single time. Don’t invest in something stupid and you shouldn’t lose. I’ve had to hold a day trade for 2 weeks before just to get my profit. But you know what? I made my money. And I factored in the difference and made double on the next trade. If you make money every time, or just about every time, that’s way better than going back and forth, losing money, making money, losing money, making money. Right? Right.

    If you go long on a stock and 10 minutes later it drops 5%, so what? Don’t be concerned about that. Be concerned when it goes up the 3% you need it to. It’s more than nerves of steel. It’s more a…look it straight in the eye and say “fck you, go down more, I dare you.” kind of thing. And if it does? Say “Fck ya, i don’t care, I’m going to go have a big juicy burger for lunch, you do whatever you want market..”. Go take a drive, go have some food, literally forget about it and when you get home it’ll probably be up already waiting for you and saying sorry. And if it’s not? Fck it.
    And likewise, If a stock goes up 20% after you sold it for 3% profit, then who cares? That doesn’t concern you any more because you sold it already. Don’t hang on to those things. That’s like playing a slot machine in the casino, and then after you get up, you’re waiting to see what happens when someone else gets on it. Who cares? Get back to work, and genuinely hope the next person does good. Don’t dwell on how you could have done better. Because you can almost every single time have done SOMETHING better. But that’s not the point. The point is meeting your goal. You don’t need to do better, just stick to your plan and make your dreams come true. Because if you dwell … they’ll only alter future decisions because you’ll think “Well maybe i’ll hold it, because that one time….” You need to seriously not give two shlts about anything that already happened. Focus on what’s on your plate right now. Focus on the now. And when the market closes, you’re done. No reading/watching news. No becoming obsessed and tweeting about stocks all night. When the market closes, you’re jobs over for the day. Get up an hour or two before the market opens and start your research. Then you’re jobs done at 4pm.
    That’s all I have for now. But don’t be worried. You CAN make money consistently by day trading/ swing trading. People who make millions are out there. I guess we just don’t say much. We just don’t tell you our stories. Sometimes I wonder if I’m the only one who does well, because there’s COUNTLESS negative stories about how day traders can’t make money. I was even searching google tonight for “day traders who made millions”, and I can’t find any thing. I found this article. Don’t be discouraged. And once you do good, the market can never get it back. Because you should be taking money OUT for you. Make a million, take $200,000 out. Make another 3 million, take a million out. Make another 5 million, take a couple million out. And once that money is out, you never put it in again. If you lose it all, you keep your millions. But you should never lose it all, i can’t even fathom how it’s possible unless you’re doing something ridiculous and going off the grid because you have no focus.

    • shiri

      Hey dude :) i started daytrading a few months ago (so far with zero profit). but i;m determined 2 make profit. I would loveee 2 hear more about your research strategy. look me up on fb “shiri sagi” (haifa university)

    • Dave S

      Also keep it simple … I am not great but I dont lose ( knock on wood) find one or two stocks that are financially sound and wont go broke and only trade short term on those … I only day trade one stock, I might make one trade a day as a rule … but sometimes when the stock is moving i might make a couple … everything is on trends ..if you keep it simple and try not to make homeruns every day and cut your losses when you know it makes sense to buy back when it goes lower then you can convince your self you saved X amount …. dont count each trade as a win or loss … I only count at the end of the day or end of the week .. I can have some bad days and still be where i want to be weekly …… I sure dont have your success .would love too .but I am not suicidal or stuck to the computer and have a clear conscious each day

      I agree the only way to lose it all is to watch it go down the drain without doing anything

      volatility is the goal of the big boys……. if you understand they are in the business of moving the market up and down you will understand your role … you arent competing with them , you just want to grab a small piece as they play their games… they cant stand a stagnant stock so they make moves that cause a stock to go up or down … then make their real moves … I am trying like crazy to figure out those pre emptive moves …..I think thats what those algorithms do ..though not sure but I believe they move the stock causing us to react in a predicatble way ..then take our money if we follow it…..

      also never ever listen to the experts on TV as to what to buy ..if they are telling you to buy ..that means they have a load to sell. I have also found specific stock news doesnt really affect us lowly short term traders …by the time we get the news … the big boys have already reacted to it and we are set up fund their wins

      and if the stress is getitng to you …. take a week or two off even a month …. the markets not going anywhere

    • Deliberation

      Mean reversion works until it doesn’t.

      I would suggest not trying to win every time. A lot of people want to win 90+% of the time, make money on 90+% of their trades, and that is a noble goal. The problem with the strategy that you describe, holding onto a trade until it turns a profit, is that the losses that you will take in the 10% of the trades have a very high chance of more than wiping out all of your profits. Think about the distribution of gains/losses in trades. It is basically a bell curve, albeit with much fatter tails, a lot of trades that might make +-5% or 10% (depends on the volatility of whatever you’re trading), but a very, very small proportion of trades can go to +100% to -100%. Those are the losses and gains that can keep you in business or take you out of business. By holding on to whatever position you have despite a loss, you are taking a chance that you will “blow up,” lose so much that you quit.

      Also, when you take gains that are up 3%, you are effectively cutting off the huge gains.

      Result is that you have a strategy with a limited upside (that gets hit most of the time), but a very huge downside (that will eventually put you out of business, even if it takes a few years).

      I could be wrong, as I do not day-trade; my timeframe is usually longer. However, these are valid thoughts in intelligent speculation (not value investing) that must be considered, and I do not see how they don’t matter in day trading.

      • Alexander Justiniano Okubo

        I think you did not understand the meaning of his comment. What he is trying to say is that you should do you and not let anyone or anything stop you from it. He gives great tips on what works for him but at the end of the day you should do you.

    • deltafour1212

      Thank you The Dude, for posting this!
      You can’t believe how much this has helped and inspired me.

    • Tebid Stanislaus

      You are insanely awesome!!!! God bless you for this encoragement. Thank you!!!

    • Roguetrader

      You are a fine example of a real Trader. YOU’RE “The Dude”! ;). Just because one failed at trading doesn’t mean the next person will too! And you are dead right about setting your self a goal. A goal and all the necessary steps involved in achieving is your road map to your journey. So hats off to you my friend. There is always hope in this life. because if there isn’t, then you’re already be dead! You have inspired me and most of us that read your reply to this self defeating post of James.

    • Katie Church

      Thank you for the pep talk. And wisdom.

    • Alexander Justiniano Okubo

      I really like your comment. You are just saying the truth. WHO CARES WHAT PEOPLE THINK OR SAY. YOU DO YOU and you will succeed if you work hard try hard and make it happen. If you get online and research how many new business fail with in 5 years they say 95% but I see business all over the place every single street corner and any where I go. NEGATIVITY IS THE INTERNETS BEST FRIEND. This strategy might not suit every one in here but you can find your own strategy your own edge your own risk and pain tolerance and go from there and a custom it to your trading and make it happen. Great response !

    • zatara wood

      fascinated to hear how you have fared over the last three years? how have the markets treated you? they can be a cruel mistress)

  • Aaron Williams

    Great reflection.

  • Alberto A.

    Just a great article from a great men. My respects. This helps me to open my eyes more than my brain do, sometimes we need another way of thinking to see whats really around us.

  • Obivious

    Great article and web site James, and yes its true. Day trading can seriously cause suicidal thoughts, schizophrenia tendencies, recluse behaviour and other unwanted personalities. But with hindsight, to go though life not doing what your heart desires is much worst. The bankruptcy, divorce, great material loss seems to pale into insignificance as time goes on. If only I could stop taking those discretionary trades, I would be onto a winner! c’est la vie. Oh Jesus did answer in Luke 12:14 And he said unto him, Man, who made me a judge or a divider over you? – So let us laugh – at us

  • Midas77

    Ironic that one of your testimonials is from day trading “educator” Timothy Sykes!

    I have been trading for a year, and I am not profitable, so at the back of my mind (and usually after I have a red day) i am always wondering if I am wasting precious time, so after a red day today (that so should have been a happy sunny green) I googled a phrase a stock broker once said to me, ie. “day trading is for losers” and this page is what came up.

    I have learnt in daytrading to be a winner at anything you need “grit” or determination to get through the obstacles that will undoubtably present themselves , but on the other hand some things are just not possible to do, the problem with daytrading is that the delicious looking carrot is always dangling infront of you – 10% of day traders made it and they have holidays houses in the Dominican and I want that!! What is even more frustrating is that estimates of how long it takes to be consistently profitable in this Game are that it can take 1 – 5 years to get there, if at all ! So am I on an gold-rush endeavor that is going is steal years of my life !!?? Time will tell

  • James, one question that remained unclear to me – do you still day trade? I mean do you still make intraday trades? If so, what is your main strategy if I may ask.

    Thank you in advance,

  • Vikram

    dfd On my 3rd trading day i had a bad trading day well due to some loss i got panic and made a wrong decisions for which i had no explaination ,, now i was a bit angry as i couldn’t control myself sooo thats cool….. i need learn how to be clam…at times
    wanted to share that fear has no place in a trader’s mind/heart

  • Tarek Salah

    In 2012 i had made some good money from my business & invested just a little in AAPL and made d 5k on that investment in 3 months…thought i was a WIZARD at the stock market & i was going to quit having to worry about money and imagined myself on a laptop in the south of france day trading…i got sucked into it, for 2-3 months couldn’t sleep, function, ignored my life, my business, lost my profits i had made from normal investment..so closed the computer & stopped doing it…3 months later i said just one more…i made a good trade, and within a week made 10k on it..thought well i just needed a break…and went back to day trading..in the end i lost enough money to buy a new 5 series BMW – it was a night mare..i can’t believe i lost so much money…but thank God i didn’t keep doing it. Now i have some stock in AAPL, which is doing ok, FB and sadly DDD and IEP which aren’t doing ok, but i’m not selling them..keeping long term. Lesson is DONT DAY TRADE!

  • J Kim

    Stay away from day-trading. It’s a legalized gambling that the house always win. Only 1% of people at the tail-end of the Bell shape curve wins.

    • Larry Von

      fatalist speak, obviously you blew out! you couldn’t find your edge.

  • Faris

    Hi James, I made 120k from 5k only and I lost it all then added another 15k and lost it. This all was in 2008-2009 after that I stopped trading… I started to get stomach problems … Too much stress and I wasn’t taking care of my kids as a family man.. I was thinking to go back to it and I found this article. …

  • Logic

    Yeah, I feel like he is almost trying to get the losers to NOT ever try… foolish to say it’s not possible

  • Barth Bagge

    I noticed that none of the “successful” Day Traders and Authors like Sykes,Brooks,Carter,etc. ever publish their true P&L

  • Khalil Zein

    How come I did not know you 100 years ago

  • SriKanth

    This is the best article both on trading and life.