How Does It End (Followup & Mailbag)

Hey everyone. After the previous post, I’ve gotten a lot of supportive messages and feedback and I don’t even know how to respond to most of it just yet. First off, I just want to say… thank y

I say this with utmost appreciation from anyone who reached out but there are way too many of you typing out “sorry to hear” as if someone close to me had died. Meanwhile I am playing pool and drinking a beer and watching the Euro tournament on a weekday at noon. I am OK. Heck, I didn’t even blow up. The subtext was that I didn’t want to wait until I blew up to have to quit. I just stopped trading because I don’t like it and I don’t like where it was headed.

Second off, I just want to say….

That was not a full-on retirement announcement. It’s more like a “what if I’m retired and I don’t even know it yet” post. I said I feel like I’m in purgatory because I’m not quite what to make of it and I also feel very far away from returning. It’s a warning sign when the emotions aren’t reset even after a month off. I’m saying this because if I ever started posting about trading in the present tense, I don’t want to hear any groans from the peanut gallery about how I didn’t really quit and it was just a cry for attention. I’m not Brett Favre, retiring and unretiring a dozen times and then stealing welfare checks, ok?

Third, I want to reiterate that I’d like to keep writing¹(more than happy to stop promoting myself on 36 different media platforms though. join the mailing list if you want the next post in time). In fact, let’s keep that going by making my last post a mini-mailbag… so I can respond to everyone on one platform.

• Have you tried to teach what you have learned thru the years to people close to you? Seeing them change their life through financial gain? I ask you this genuinely trying to help, maybe mentoring someone close to you or somebody you think is worth and watching them evolve, might be something that gives you joy about trading again. — Gabriel F

Some people have asked me to mentor them. I always say no. I just think I’d be a terrible mentor because of the way I check in and out of trading. Let’s say I agreed to be your mentor. We’re going to have a daily dialogue, I’ll seem normal and engaged, answering questions like “thoughts on NVDA upside today?” or “AAPL breakout at 128 good entry maybe?” and whatever. And then one day I’ll ghost because something really pissed me off like I was going to bid to cover for a nice $10,000 gain but the HFTs front ran me and reversed the stock like the assholes they are and I hate my life and I quit forever. I think if you want a stable mentor, you need one of those trading addicts who shows up every day and wants to unburden all his opinions on you, even if you didn’t ask.

I have “mentored by proxy” some young traders who ask questions and I answer on my own time. We talk about shit but it’s unstructured and non-commital. What I’ve learned is this.. some people try very, very hard to succeed at trading with incredible, earnest effort and they have a good process and they don’t recklessly gamble… BUT… it just doesn’t happen for them on a healthy, linear timeline and it sucks and I don’t know how to help speed it up.²This gave me a newfound appreciation for how quickly I was able to get to consistent profitability and analyze why it happened, in the FNMA-related posts in Prop Trader Series I certainly don’t want to upend my life to become a guy who charges money and creates a formal teaching program and has to think all of that out because I think I’d care too much to half-ass it. So I just don’t bother at all.

2013-2018 Pete probably would’ve been a good mentor. Now I’m too jaded.

• Very curious what makes you burned out when up enough for 80k to be a single digit [drawdown]. Makes me wonder if automating what you do like I did could make the difference for you. — Derek

Regarding the burnout… it’s currently hard to describe in a satisfying way. Maybe when it feels right I’ll post something that can flesh it out. Long story short I just feel depressed when I’m trading–win or lose. There’s no curiosity to learn anymore. There’s no self-forgiveness for any mistakes. It’s just full on nihilism, feeling like there’s nothing I can do to change the current state of things and the chips just roll where they roll. Every day is just… subpar trading and then this feeling that it was inevitable and that I completely deserve it because I haven’t done anything to change it nor do I want to try.

I think a lot of what happened is because “accumulated tilt”.³This is something that Jared Tendler coined in his book, The Mental of Trading. Just negative thoughts and anger accumulating for a long time and my ability to discard such thoughts has degradedover time. It used to be I’d feel depressed but could still trade at a high level. Then as I got older, I’d have to take time off to feel better. Then it took weeks and months and now who knows how long. Now the garbage is overflowing and I have the arduous task of having disposing it all to get to feel fresh and clean again and I guess the first step would be to fix the garbage compactor? I hope that analogy wasn’t too terrible.

Automation is another subject I’d like to write about. There was a time (2018-2020) when I attempt to structure my trading and make entry/exit signals more mechanical and hard rule-based–sort of the halfway point between full automation and discretionary. I worked with someone to do it and we were both part of discord focused on mechanical trading signals. It was helpful to create these rules but they quickly became soft guidelines. Many of the simple entry/exit rules we came up with appeared to lag and underperform what I “manually” saw in real-time as superior entries/exits. I could make money without being a purist about it so I stopped worrying about it. Currently, I don’t see myself having the bandwidth to aim for full automation and tackle on a new set of problems in addition to the old ones that I didn’t reconcile. Would it be great to have a bot to print money for me while I didn’t give a shit about trading, hell yes, but I never did the work for that so…

• Dedicating the majority of your life to one task – i.e. trading – will limit your ability to try out many other exciting things in life. Once trading is gone, you have no clue what you actually like or where you could develop a trading-like drive, because you never really had the time or energy to try it. It‘s like a muscle that shrinks when you don’t use it. Rebuilding that muscle takes time, which makes the switch from trading to finding something else very difficult, especially since trading is such a fast-paced activity. Finding the “new trading“ will require a ton of trial & error. Been there, done that. And btw: an external coach is extremely helpful for all of that. I know asking for help doesn’t fit into our macho trading culture, but fuck it, that’s how it is. There are too many difficult questions to answer to do it on your own — Dax50

I wrote this over a year ago now: What do you do when you dont like what you do anymore?

This was really building up for some time I guess. This is a good time to mention that although 2020 and 2021 were my best years in PnL, I felt absolutely miserable while in my seat. My perception was that everyone was doing great, even the biggest idiots, and I had to pour 150% of myself into just keeping up and not being left behind. I’d make a huge trade and just feel relieved I didn’t fuck it up, rather than feeling any satisfaction or accomplishment. Just being aware of that really changed my perception of trading and how it defines my life.

I tried to fix things, like one does for a failing relationship. I tried to pour passion back into it and work harder. I tried to detach from it and just “do my job” like a pro. I did try to work with a psychology coach–two in fact. One that I had worked with for a long time and we did great work when I was younger but the problem was I was going through the motions when trying to recapture our earlier magic. It was almost like I was too familiar and comfortable with him. We’d spend half the session talking about baseball. I tried another guy but I didn’t feel a great vibe. He was a pro, but we just lacked the chemistry. Both were expensive and my effort was uninspired so I stopped.

The final card I played was basically this working on blog and connecting with all of my readers. When I felt like I was on the brink of quitting from underperformance in 2023, I started writing again. Many traders reached out, I made a lot of connections, and I felt like I was a part of the trading community on my own terms. People wanted to hear what I had to say. This was really cool and empowering. I started thinking “ok this is the solution… Pete 2.0!” Pete 2.0 is a writer about trading and a part-time trader who doesn’t care about the daily grind anymore. He just wants home run trades like the SMCI parabolic breakdown. That was the vision and I felt inspired for the first time in years.

Then reality set in and Pete 1.0 took over… started doing the same shit shorting extended stocks and whatnot. It became an unbearable daily grind again and all of a sudden, I felt I lost whatever connection I had built with everyone. I didn’t want to respond to any e-mails or post on twitter or write posts on this blog. All that inspiration and hope now felt fake and this was even more demoralizing and forced me into a deeper shell.

• It’s ok for past passions to fizzle out. Trading got old for me too. Ive found different things I’ve enjoyed since then but sometimes nothing will match that same excitement and passion. Much like athletes or Olympians that spend their whole life playing a sport then move on. Youre not going to get the same high as being in the Championship games and thats something we need to adapt to. It takes time to find the next chapter. I’m still exploring and honing in on mine. We are constantly changing. It’s ok to take time and take space and to feel lost. That might last a month or a year or five years. My own interest in trading comes in waves but it’s never beyond a 3/10 anymore. Haven’t read a trading book in 7 years. I don’t fight it. If the passion is gone, maybe it comes back here and there but there is no forcing it. — Lance

A post from a top level pro who is now semi-retired. Will just add shared thoughts to it:

When I first got into trading, it was my way of expressing a desire to be a peak performer.⁴That’s the best way to describe discretionary trading, while systematic trading is completely different approach–more comparable to like a mad scientist in a lab. I wasn’t athletic enough to be a pro athlete so I’ll be an athlete of the mind. I’ll take on what I perceived to be the ultimate challenge: this high stakes economic game that everyone says is impossible to beat without a Harvard pHD or insider information. That’s what really had me humming and working every day with inspiration and creativity. Going to coffee shops with my laptop to work on a side project, reading trading books to end my night, and then being first to show up at the trading desk. Even regular things like exercise, sleep, and food had an underlying purpose: “whatever you do, make sure it helps, not hinders your trading”

I was good. I saw a lot of traders achieve great. The reality started to hit me that I won’t be the best or even the “local best”.⁵As independent traders, we all know we will not reach hedge fund level nominal returns so I feel “local best” is what to realistically aim for, if extremely ambitious. Being the best independent trader of your time probably has you in the $100m-1bil range for career earnings if I had to guess. It slowly started to feel like a job. Attitudes started to shift: I had to put my ego aside and just “settle” for good. I wasn’t going to work for the mantle of “best” and I wasn’t going to pay the emotional cost of it of pursuing it either. I wanted to just cruise. Maybe that was the beginning of the end.

Lately I’ve found my passions in familiar old hobbies. Cooking, fitness, and playing pool. The stakes aren’t that high and it’s nice. I’m not trying to be the world’s best at any of those and I think that’s a healthy place for me.

• I was in a really poor mental state, so, I decided to spend more time reading than trading. Ordered 15-20 books. Started with O’neil, Minervini, Livermore. Finished about 5 and a half of the books, and then GME short came, I even forgot what puts I traded, think 50 or 45. Jumped right back into reading. Then GME set up again for 35 puts. Back to reading, till we got DELL, SMCI, NVDA, MU the other day. I hate reading, as I have only 1 eye, and Im a slow reader, 20-30 pages per day, or I get massive headaches. Reading during market hours keeps me away from trading non-A+ set ups. — Yordan

I can’t even read a trading book right now. I just check out immediately. Sucks because I bought a bunch of them just two months ago. It’s like a reflex now–I see trading content and my brain wants to ‘X’ the window. Then I shake my head and think to myself “Pete, JFC, why haven’t you moved on with your sad life yet?”

• Eh, I known the feeling of losing interest and even despise trading. A once burning desire to show the world or yourself how tough the balls of steel are until… the chit hits the fan and there’s no umbrella to protect the feeble ego, which in the process prostitutes the much delicate side of your spirit. The dark side of trading rears its hard head and form there it all goes down the glorious chitter. It’s like riding a bike, you either know it or not. That’s the messed up part. Once you’re aware of the dark side psychologically speaking you get to see life from a whole different angle. What is next is an empty space of mixed feelings mostly negative, which make you question your whole being. The good part is that this rut shall pass. The bad part is that you’ll have some scars. — Cornel

I’m just posting this because it’s a good comment. There are stages to this game where once you cross it, you can’t go backwards… like going from a child to an adult, you can’t become innocent again. You just have to find ways to deal with the new reality.

As of 12:45pm on June 25th, I’m going to stop but I might add more if I feel like it or if I missed a good email or two.