Struggles And Lessons From The World's Hardest Career: Day Trading

Why 9-5'ers are uniquely unsuited for day trading

I’ve spent the last ~2 years as a day trader grinding 70-80 hour weeks in hopes of “making it”.

I’ve exhausted myself staring at charts, burning the midnight oil, and generally working non-stop, week after week in hopes that the more I work, the faster I get to my financial goals. However, the Lamborghinis, private jets, and caviar continue to elude me. I’m still a breakeven trader who actually went red into the end of 2024.

Why don’t I have any results despite 2 hard years of grinding?

Hasn’t pop psychology, and the 10,000 hours rule told us that if we consistently put in the effort, we should be getting results? So shouldn’t I be making at least some money by ending the year green?

The Map Is Not The Terrain

Early on in my career I discovered that software is brute-forceable: if you want something done faster, put more time into it. If 8 hours a day isn’t enough, work 12 hours. I’d observe this effect every time we had a deadline and this solidified from a pattern into a law.

I’d go on to apply this law to increase my pay and rank, but this has been the single-handedly most devastating belief for trading.

Put simply: You cannot brute force trading.

Over these last 2 years I’ve put thousands of hours into backtesting setups, writing trade reviews, journaling, etc. These activities are beneficial, and necessary to becoming a successful day trader. However, this is where things went wrong.

My impression was if I did more backtesting, more writeups, and more work in general, I’d get to the end faster. In other words, if I applied the lessons I learned in software, then boom, I’d be a massive success.

So what went wrong? I neglected a critical aspect of trading: performance.

Day Trading Vs 9-5

Most, if not all 9-5 jobs revolve exclusively around “working” and there is no “performing”. Usually you’re working on a deliverable in project form. Once you finish it and you get the sign-off you need, you’re ready to move on.

In trading, there’s both aspects in what I call offline vs online work. The offline work consists of researching setups, tracking market cycles, and doing trade reviews. In other words, the work you do when the market is closed. However, the online work can’t be neglected: trading real money.

This tends to deal more with emotional discipline like waiting for your setup, following your plan, and staying focused.

Trading is like a sport in that sense. A basketball player has “offline” work around watching film, strength training, and shooting drills. Game time is the online work.

My biggest mistake of the last 2 years was spending 80% of my time on the offline work, and only 20% on the online work. With hindsight, the split should be inverted in favor of the online work, but this depends on person to person.

Rude Awakenings

When I made the switch to day trading, I didn’t plan my approach. I just took what I learned from my previous career and assumed that everything would take care of itself.

The big takeaway: What got you out of Egypt won’t get you to the Promised Land.

No matter how successful you are, get ready for a helping of humble pie. At least 50% of what made you successful will be thrown out the window. The other 50% will need to be reexamined for the domain of trading.

It’s hard to give specific advice, but to anyone at a 9-5 interested in trading: Ensure that you focus both on the offline and online work.

Fortunately, if you’ve reached success in any field, then you’ve already mastered the discipline to complete the offline work. Most 9-5 jobs are task driven, which lends itself easily to things like backtesting and journaling.

This means most 9-5er’s should focus especially on managing emotions because this is the area in which you’re least proficient in.

It’s difficult because it’s amorphous in nature and harder to get a handle on. You’re dealing with internal feelings like fear and greed, instead of something concrete like a spreadsheet or report [1].

The Desire To Be Right

A misconception among the public is that the smarter you are, the better your returns. The truth is a complete 180: the smarter you are, the worse your returns.

Let me clarify: If you’re at a job where being right is a key requirement, then trading will be difficult for you.

Sadly, this is most 9-5’s; being right is part of the job. Promotions and pay raises aren’t given to those who consistently produce wrong or faulty deliverables. You get punished for being wrong, and rewarded for being right. Years and years of this feedback loop conditions 9-5er’s to associate pleasure with being right, and pain with being wrong.

This attitude is especially treacherous because 9-5er’s will come to the market expecting to bat 100%. What do you think’ll happen when they inevitably lose?

I can tell you, because this happened to me:

Because you’ve spent time and energy developing your playbook, you trust your data, and therefore believe you have edge and should make money. Compounding things further, you’ve been conditioned through your job to need to be right on a daily basis.

When I lost, I’d lose my cool. I’d get frustrated that my trade didn’t work when my playbook said it was supposed to. And by the way, not only are you wrong on the idea, but someone just took your money from you, which produces a deeper emotional reaction.

The natural human reaction is to get even, which causes a host of emotional issues like revenge trading, doubling down on a loser, or jumping the gun on the next trade as you try to get back at the market.

I focused more of my energy on my playbook, trying to get the hit rate up to 100%. I pored over example after example looking for “why did this work and that didn’t”. I realize now I was doing what came easily and familiarly: project-style task driven work.

The kicker is the more time you spend on the offline work, the worse your trading results become. There’s no 100% holy grail, and your time is wasted trying to find it because you’re not solving the actual problem in your trading: execution.

Focusing on execution is difficult because it’s unfamiliar, vague, and amorphous.

Emotions

Ignoring the execution side of trading occurs more often than not because it seems insidiously easy. What’s so hard about clicking the buy button?

This is overly simplistic and reductionist.

Trading in a live environment is like an iceberg. All you can see is someone clicking buttons, but beneath the surface, there’s a massive amount of discipline and emotional control underpinning clicking the button at the right time, with the right size, with the right plan.

Trading execution is synonymous with emotional management. The difficulty lies not in making a successful trade. It lies in managing your decision making when things don’t go to plan and you lose money.

This is a difficult concept to grasp because no one really talks about this in the day trading world. You mostly hear banalities like “follow your plan”, “cut your losses”, and “never double down a losing trade”. This is about as good as telling an alcoholic to “just stop drinking so much”.

Furthermore, all this was invisible to me. As an engineer, I was used to working with numbers, data, and deliverables. I naturally gravitated towards backtesting and working on my playbook. My data driven brain was just incapable of understanding this as an area of improvement.

Undoing Evolution

The truth about improving emotional management is that you’re rewiring hundreds of thousands of years of human evolution, specifically around competition for a limited resource, and the unjust feeling of having something taken from you.

You’re dealing with hardwired reactions meant to improve your chances of survival. It’s not going to be straightforward, and this is the reason behind the abysmally high failure rate of day traders.

Back in our days roaming the African savanna you can imagine that, when presented with a limited resource, you’d mobilize your energy to take as much as you could, even if you were late to the party and there wasn’t much left.

This manifests in the market as FOMO. But FOMO on the African savanna is a good thing. Some is better than none, and at worst, you don’t lose anything. But in the market, you stand to lose money if you FOMO chase. There’s upside in both cases, but only in financial markets is there also downside.

The specific problem varies from person to person. Some traders struggle with FOMO but not with revenge trading. Others struggle with cutting their losses when they’re supposed to, but have no problems with FOMO.

Therefore, to improve at emotional management means to first identify what issue(s) you have, and then to create deliberate practice routines to remediate it.

Solutions, Beliefs

Fixing emotional execution issues requires an individually tailored approach. Instead of giving general advice that may not apply to everyone, I’ll share my approach and explain the reasons behind it:

Looking back at my trades, I’ve identified the most common class of errors:

1. Taking trades outside my playbook

2. Revenge trading when I take a loss

The first issue stems from FOMO, while the second deals with handling a loss. At first, I thought they were unrelated. However, upon reflection I realized that I had deeper seated beliefs that caused these mistakes:

1. The purpose of trading is to make money

2. I need to make money every day I trade

These beliefs were responsible for shaping my actions. Of course, if I believe that the purpose of trading is to make money, then I’ll take trades whenever I want, even if they’re not in my playbook. And if I believe that I need to make money everyday, then when I take a loss, the first thing I’ll do is try to make it back, even if it’s on a sub-optimal setup.

Therefore the first step isn’t to add rules (which create complexity and noise), but to examine the underlying beliefs responsible for the errors. Meditation and journaling are both great tools for doing this. As you reflect on your mistakes, try to identify 2-3 beliefs that could explain 80% of your errors.

Next invert the belief and transmute it into a new belief that will serve you better:

1. The purpose of trading is to wait until the market gives me an opportunity that leaves no doubt in my mind that it’s my setup

2. Even if there is no doubt in my mind that it’s my setup, I still don’t control the outcome of the trade

3. Losing is not a choice, but staying calm and focused is

Now that you’ve identified the problematic beliefs and replaced them with new ones, you can use deliberate practice to fix one issue at a time. You shouldn’t be trading with real money at this point, either trade on the simulator, or with 1 share positions. At this step the goal isn’t to make money, but to correct an execution issue.

I suspect the tricky part of all this is staying on the simulator especially if your setup starts appearing and working. You’ll feel the urge to trade real money, but you have to stick to your guns. The market will always be there, and there’s no point in paddling when there’s a leak in the boat. You’re not looking to capitalize now, but in 2-3 months time.

Specifics

My specific plan of attack is to trade 1-share lots, and before entering, to write down on paper:

1. The name of the setup

2. The criteria

3. The entry tactic I used to get in

4. My entry, stop loss, and profit target

Will this solve my issue with taking trades outside my playbook? Yes, because I’ll be forcing myself to think through which setup I’m taking, which hasn’t happened up until now. To date, my belief that I need to make money everyday would short-circuit my prefrontal cortex, causing me to jump into trades without edge.

If I take a loss, I’ll take 3 deep breaths and remind myself out loud that losing is part of the game. I’m not going to win on every trade, and the outcome of the trade isn’t in my control anyways. I just need to focus on waiting for the next playbook setup to appear.

The purpose is to deliberately correct my belief that I need to make a loss back to end the day green. I’m also reminding myself of the new belief that I want to internalize.

I suspect I’ll need a month’s time to gather enough actionable data, before deciding my next steps.

Closing Thoughts

It’s been a long two years filled with valuable lessons despite ending the year red. A major takeaway is hard work isn’t enough. You need to work hard on the right things. If my software career taught me the value of working hard, trading might be teaching me to work smart.

Being more humble and recognizing that I was switching into a completely unknown career would have served me more. I made the mistake thinking my background in software made me smarter than the market. In my mind, software was a 9/10 in difficulty, and trading was a 2/10.

This led me to underestimate the difficulty, thinking it all boiled down to how good your playbook is. It’s clear to me now that anyone can create a playbook, but not everyone can rein in their emotional impulses.

I suspect most traders with a 9-5 background will struggle with many of the same issues I did. However, after reading this, I hope you’re able to become greater than your need to be right and your need to make money. I hope you invest your time wisely, working both on a world-class playbook, along with world-class emotional management.

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[1] This lends itself to difficult scenarios like someone who’s unable to temper their feelings of greed and chases in, only to buy the top. Or someone who knows they need to stop adding to a loser. How do you fix this? More on this in a separate post.