You know what’s interesting? I can’t tell what my ELO is.
Trading gives you absolutely zero feedback on what your rating is.
It doesn’t tell you what cutoff makes money in which environments.
It doesn’t tell you where you started, or what that mistake you just made set you back.
Or whether despite mounting P&L losses, you are improving sufficiently.
I’m not sure whether I’m misevaluating my competencies. Or my resume and aptitudes aren’t the fit I thought they were. In The Playbook, Bella talks about how you might have been a varsity athlete, or from an Ivy League school, or got an 800 on the math SAT, or you were a professional poker player but that any of those individually doesn’t mean the qualities that made you successful in those arenas will translate to trading. Well I was all of those. So I thought I could do this. I still think I can.
Last week I upped my size against my own self-imposed restrictions. I tore through the charts I was trading and took huge positions. Even huge positions concurrently. I signed a form to give me the MAX EXPOSURE possible. I didn’t realize that the forms weren’t just unlocking the $40k position size I was fiending for, but actually letting me basically jam my full portfolio at 4x margin into a single stock if I wanted.
Does that mean my ELO isn’t what I thought it was?
It’s so hard to tell where on the Dunning Kruger curve I fall.
That curve enables practically all sharp and soft interactions across competitive environments to occur due to people misjudging their abilities relative to the field.
I’ve been historically EXTREMELY good at gauging my relative skill and thus my expectation.
I made a living off of doing so.
Now here I am in a new arena. It’s not seeing my bullet rating fluctuate on chess.com because I accidentally hung my queen. It’s seeing myself adding into a position to fade some natural gas shitcoin that ballooned 10 days after a news catalyst because the market is finally paying attention to it, despite this news catalyst having an outsized effect on causing this stock’s price to be more resilient at levels I expected to collapse.
I learned an incredible amount last week. I am a materially better trader now than I was a week ago.
Did they bump my ELO 20 points? 50 points? I can’t tell.
And P&L is a lagging indicator. That’s why I ripped size last week, I had wondered if I had reached profitability. Clearly, after losing $15k, I had not.
That’s ok! I took a few hours and some nerds gummy clusters and emotionally consoled myself.
I used to use porn or drinking to assuage negative emotions following significant financial loss.
Nowadays I live soberly so drinking is out. However for porn, that’s kind of the final frontier of vice for me.
Kick that and I’m a healthy man. If you knew the journey I’ve been on in my 20s, both the descent and the climb back out, you’d know how much that label means to me.
I loathe vice. However it had served a purpose while enduring the occasional (and towards the end, more frequent) $50-200k losing days while playing high stakes poker.
But now, I love the quote. That the market is a mirror. It’s so true.
I see it so clearly- to be the winning trader that I aspire to be, I need to have my emotions in check and to be able to control myself, both during trading hours and afterwards.
That involves excising pornography from my life.
I set a penance last week that if I used porn in a week, I’d donate $1,000.
Well, after 6 days. We’re talking under 24 hours left. I blew up on Friday after being so close to being unstuck. I had just lost $6.xk and thought to myself, what’s another grand.
Well, at the time I actually was deluding myself. Saying, “well you made it 6 days in, that’s good enough. Go ahead.”
And so I did. And when I calmed down a few hours later, I realized: No, I actually do have to pay this money. So my next doordash driver got a $1k tip. Was that the highest, best place to donate the money? Obviously not. However they did say that his mom had an injured foot and so he was going to drop it off from the car. Well when I went down to the car.. no mom. It was just a lie so he (likely an undocumented) could use someone else’s credentials for delivering for doordash.
Well, he probably needed it. And it feels good to have stuck to my word. I live a moral life and stick to my word. That’s just what I do. This is part of my post sobriety regimen for living life. And I’m glad I followed through. It makes me feel good- and proud of myself.
Anyway, I’ve run that back with a $10k penalty through the end of the month. And now I won’t be able to placate myself saying that “9 days was good enough, I don’t need to give away the money.” Because I clearly see I will.
Back to trading. For me to become the best trader I can be, I need to have clear emotional control during and after trading hours. I didn’t have control of my emotions during either of those periods. I traded emotionally (although not as bad as some prior sessions) on Friday, and I soothed myself afterwards.
I will become a better loser. I will become a more mature and resilient trader. I will evolve into the trader that the market requires. I have confidence in that.
What does it mean for my ELO?
I’m back to trading tiny size this week. I was initially planning on $2k max position sizes, but I’ll do $5k instead. I have AT LEAST another $70k I’m willing to invest, but I was thinking about that today.
I’m really all-in on this. I’m going to make it work. It will turn around in the time and financial runway I have remaining.
I started with a $120k and 12 month commitment. I’m only ~9 weeks in to that. I’m a BABY.
Give it time. Sometimes after a trading day, especially Fridays after a long week, I collapse on my bed exhausted and pass out. Completely drained. My brain aching from the stretching I’ve been putting it through.
I can clearly tell that I’m improving. I feel it so acutely.
There is a difference to being able to trade $5k positions profitably and $30k positions profitably. Not just on getting fills or mechanical aspects, but also the emotional restraint required navigating the decision of holding offsides or when to enter and how. Scaling in or out. It’s possible that I was able to trade $5k positions profitably last Monday when I upped my size. That doesn’t mean that I was then +EV for the increased size I used.
I encountered some scenarios that were net new to me and my understanding of more well trodden (if anything can be well trodden for me at this early stage) situations crystallized further, with new connections forming for how to engage with them profitably.
I am reviewing all of my trades from the beginning till now and I see such obvious adjustments I’ve made.
I’m firmly committing not to increase my size until I have two sequential positive weeks. I am in $5k position land until then.
It’s not so bad- think of it like this. If I have 12 months (at least) to make it, what difference does it make if I scale more slowly? The end result is to be a consistently profitable trader 15 months from now. I will get there, I am absolutely sure of it. The question is what route will I take.
These are the constraints for my trading going forward: attending every trading day, $5k max position, being diligent about my DRC, doing weekly review, reading books and watching SMB content. Engaging with my trading partner and other traders ascertaining what to assimilate or not. Creating and refining my playbook. Becoming aware of my current emotional limitations and expanding them while ironing out my final vice.
I’m going to be successful at this. There is no plan B.
I claimed I was adrift at sea. That’s just an uncertainty about my ELO. Best guess right now? Somewhere around 1400. Which coincidentally is my online bullet rating. The tougher question I’d ask is, what is the ELO cutoff for profitability and how far away am I?
I’ll find out.