2020 Year-End Thoughts and Nov+Dec Recap
Happy New Year’s everyone!
Here are a couple of my immediate year-end thoughts:
*Note* — As usual I went overboard and it went from a casual blog into a full blown one
I won’t be the first, or the last, person who will say that 2020 has been an absolutely amazing year to be a trader. Personally it has been a life-changing one, one which exceeded my expectations in every way. I will admit that timing and luck do play a big factor in it all, but I do also believe that, for many of us, it has been a culmination of discipline, practice, sacrifice, diligence and work ethic. I am very grateful for the opportunities we were afforded and wish to remain just as hard working, humbled and dedicated as I’ve always been moving forward.
I have been pondering how I should address this year. I didn’t know if I wanted to keep it concise, or if I wanted to post results or if I wanted to do something more. I decided that it might be worthy just to speak from the heart.
Truthfully, the way I feel is that Twitter really doesn’t need another person who just dangles the carrot of success over everyone’s head, nor another vain post about their individual success. I don’t know if it helps so much as hurts, it damages peoples’ self-esteem in some way or creates a one-way reflection of what it takes to be a success in the first place. When you all you can observe is the upside of trading, you might begin to compare yourself to an inequitable persona.
It feels kind of meaningless in a way. I mean… money is awesome but paradoxically I feel that whenever money becomes the focus, you quite literally inhibit your own abilities. It makes it difficult to do what it takes. You might let your stops run, you might cut profits short or get out of a trade too soon. The very thing you desire will elude you if you constantly chase the emotions associated with it. Simply focus on trading well, I promise that it’ll lead to prosperity far greater than you might’ve imagined.
To me, the meaning of sharing comes in the form of a lesson, a value or a moral. Those things are not sexy at all, they are all going to derive from personal hardship and experience. These are the things I feel like leave a lasting impact, that make a bit of a difference, that don’t compromise integrity.
I think there are a lot of people who are really amazing and doing amazing things by sharing, don’t get me wrong. I do, however, believe if you’re kind of new or just experiencing a taste of it all, really consider the damage you do to yourself by being subconsciously knowing that people will see it. I’ve been there before and I think that it can be the seed of a latent disaster. You may very well form an identity around being right or being green or being on a streak or hitting that next goal or whatever. The issue with that is, well, trading is really tough and it’s very very possible that one day your obsession over appearance or identity will give way to a humbling from the market. I’ve both experienced it personally and seen it happen to dozens of upcoming traders. I’ll just leave it at that, something to consider.
To the guys who nailed it, amazing work guys! Let’s keep putting our best foots forward and congratulations.
To the guys who are figuring it out, keep grinding. It takes time mixed with blood, sweat and tears. This is YOUR journey. Consider reading my blog addressing the perception that everyone is a winner HERE. The patterns really matter a lot less than you think, trading has a lot to do with the basic tenants of managing your risk and focusing on a process you can believe in and repeat over and over and over. Gain conviction in your beliefs by backtesting, screenshotting, reviewing and building systems to build on your strengths and negate some of your weaknesses. Maintain ideas from the traders you admire and who are willing to share hints of their best practices, explore those whenever you are ready. The reason a lot of traders end up being somewhat different is because we all have different influences and mixing insights together can help you stand on the shoulders of giants to potentially reach greater heights.
Here are some of the major thoughts and lessons for 2020:
1.
“Comparison is the thief of joy.” Theodore Roosevelt.
Comparison has no place. I think it’s great to see what’s possible, to be inspired and to look up to others, however I think that once you develop your process and your strategy then it’s time to focus on being your own best trader. Consider having a boring ass twitter feed where you only receive value and positivity, it does a lot for my mental health. I know it’s super fun to see how people are doing but at a point it becomes totally irrelevant to you and, in some cases, can negatively influence your trading. You might see someone getting away with murder and that will subconsciously factor into your mindset when you lose composure.
To illustrate a point I just want to say that I’m a pretty damn good trader. I think I deserve to be able to say that for myself. Objectively I am in the top 1% and that’s where the issue lies. I still compare myself and feel dissatisfaction… no matter how much success you achieve, there’s always going to be someone who is bigger and badder than you. They have their own methodologies and their own circumstances and we are all cherry picking parts of ourselves and presenting them on social media as well. I am certainly not immune to that and part of the reason I don’t share my results in dollar form is so that I can have the comfort of not being exposed and vulnerable. I could increase my followers… but I’m not selling anything, I don’t want fake accounts impersonating me and I don’t want to attract people who only care about shallow concepts either. I am just a true trader who is sharing his true experience with hopefully a shred of credibility. I used to think it was vain to pat yourself on the back but I realized that all I want now is to feel happy for myself for once in my life, I don’t want to be the husband and father that has everything but has no self-esteem. There’s no shame in owning who you are and what you have achieved, but the moment you see some other hotshot… the kid who invested in Bitcoin or TSLA or dropships millions of dollars in revenue or made a fortune from gaming, Youtube, or whatever man… it’s endless. At some point when you finally achieve some objective success, you have to find peace with what YOU need to live happily and ignore the noise.
For that reason, the majority of the work that I have been doing is with the help of Kim Ann Curtin, “The Wall Street Coach”. For me, the work has to do with reconciling my feelings about success, feelings about myself and living my best life while I’m ahead and sustaining it. I just don’t see a world where anyone can be happy always chasing the carrot on a stick.
2.
Show up to the market with 0 expectations. A couple of times this year I wanted to push some type of goal and it just backfired on me completely. I put a lot of pressure on myself to keep up pace, evolve and extrapolated expectations based on prior results. Needless to say, the market doesn’t give a shit about what you want or think. You can be incredibly consistent and still lose, that’s the way the market works. The worst thing you can do is to get frustrated and make things about $. Whether you are drawing down somewhat and dig a deeper hole by trying to make it back or you’re feeling down about a streak of losers, it’s important to put everything into perspective. When you truly have developed an edge, your job is to keep executing on it as best as you can regardless of how you feel… consider this DM regarding November 2020.
Straight off my best month ever in October, I decided to size up going into November. November overall was probably the worst month for my trading strategy I’ve seen in years. A calamity of factors including the elections, EV sector hype, low float mania, earnings season and bullish fervor gave way to setups where if I executed my system perfectly, they would still produce negative results. That was compounded by me sizing up, but also having put pressure on myself to reach financial goals to maximize an impossible deadline. It is a little complicated to explain but simply said, I wanted to make an absurd amount of money to maximize my tax deductions in a brand new entity… and I had about 1 month and a half to produce it, it was December 1st or bust, that was my deadline.
So for the first time in a long time, I was not thinking clearly about the market and the emotions would leak into my execution whenever I felt weak. I didn’t realize it at the time, but the four or five times I let my stops run slightly more out of frustration were the sole reason why the month got out of hand. I could’ve literally lost the entire month and still have made it all back in a few good trading days, but the extra lost capital just meant extra time to recoup it all. Of course, at the time, I didn’t really know it was going to be a bad month, the goal I had was crazy but totally achievable if I had a market resembling anything like the prior months. That is basically where I went wrong. Sizing up already brings with it it’s own distinct challenges and, for that, I recommend sitting on your size for quite some time to manage your feelings about the swings and forming your new identity around this.
Seeing my goals slip away and making random mistakes once or twice a week really started to create quite the setback. In terms of R it was nothing to worry about, but I started to zone in on the increased PNL swings. My goals needed capital in $ form, not in R.
I conducted very rigorous reviews and took blow after blow in the relentless market and tried to make different system adaptations to reconcile with it’s volatility. Those systems just proved to be band-aid solutions, mixing up the results and screwing with the process. I quickly redacted changes upon realizing it was just worse but tried several different iterations throughout the month. I had been executing the same system more or less for a great deal of time, one streak of losers really didn’t have merit when weighed up against an entire year of proven success.
My hopes were basically dashed that November when I realized my goals were just unattainable at this point.
In the final week and a half stretch of November my endless reviewing always came to the same conclusion: Execute well and you would’ve been fine. It all came down to the few days that sunk me needlessly deeper in the red. You really cannot ask for more of yourself than to live up to your objective ability to execute to plan.
I resolved to myself that I am going to follow my plan no matter what and just get the month over with. Once the month was over I could reset and just focus on the only thing that matters: execution.
Cut losses no matter what, execute your plan. Additionally I resolved within myself that I would not reach my goal and that if I made 0 gains even during a drawdown for the rest of the year that I would be more than happy with what I’ve accomplished. The power of release really helped me put things into perspective, I cancelled the plans I had to maximize my entity and set off on this journey to trade without regrets and free from outside pressures. That was the exact moment that everything changed. I started to trade with a lighter heart and without fear of loss, back to the peak mental state that got me to that point.
Below I’ll go ahead and depict how the November went and the December to round out the year.
Looks pretty dramatic right? I had 5 red weeks in 2020 and 0 red months. November 2020 appears to be a blowout month where I have had 3 red weeks. Well it’s partially an illusion, nonetheless a fat losing month due to sizing up and just based on the ratio. For scale… in October I was up 149R and in November I was down -66R. I believe over 25 of those R conservatively were avoidable if I was just focused and not making emotional mistakes. In December I had a three day period where I put up 56R just to prove the points I made earlier about being able to recover a month in a few days. Now let’s transpose the red onto the profitable months of the past.
As you can see it was a blow, but much of it was due to proportions of sizing up versus the past, the market conditions (virtually unwinnable on backtest) and a few of my random slip ups that counted much more in $’s and mentally than I would’ve imagined. If every month was weighted equally in R then there would be no contest in terms of gains to losses ratio and it would’ve been perfectly normal, however sizing up has it’s costs and benefits. The fact is that what I would’ve considered a massive success earlier in the year just pales in comparison to where I am now.
Let’s zoom out on another scale using equity curves (2019-Dec. 2020) both standard (top) and logarithmic (bottom).
Standard
Logarithmic
Again, zooming out and focusing really puts things into perspective in another way. I forgot to mention that it’s totally normal for me to have streaks where some days or weeks are just impossible under my system so months like September served as really good lessons about staying focused. In my video recap of September I really talk in-depth about how to stay strong and why it’s important to use the law of large numbers to determine if it’s wise to keep executing an edge or not HERE.
Following September was October which ended up being my BEST (October 2020 recap) month ever and that was without a single change, that is the lesson I want to impart. That is why I initially responded to the DM saying that I didn’t want to just share November… I wanted to create a plan of action, create an methodology for achieving the results I want, relinquish the pressures I was putting on myself psychologically and then PROVE IT.
This is the proof…
It was a great month. Despite having such a hill to climb, I was resilient and patient with myself. I had plenty of crappy days but didn’t let that change the fact that I didn’t need to hit any goals or need to make a single cent to be happy with my year. I was just short of hitting some of the milestones by a few % that I had set for myself before November happened and that was all because I didn’t chase anything, I had no expectations and I was rewarded for it.
As I write this conclusion now it’s 11:57PM in California, 3 minutes before the New Year. I hope this inspires you and helps you on your journey. I’ll end it here and poetically welcome the New Year with zero expectations and a desire to trade well above all else.
@BrianLeeTrades — Twitter
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Sincerely,
