How’s trading going lately? Not going to lie — it’s been freaking awful.
And before you go there, no it’s not because of the Trump tariffs, civil war in Mexico, or the nuclear threats coming out of Iran and the Middle East.
Why has this month’s performance been absurdly bad?
One word: ME!
A few weeks ago, I reset paper trading account because I want to start with $10,000, a clean slate, and a fresh, risk-averse mindset.
Initially, things started out good. I adhered to following rules, only trading valid setups, proper position sizing, and not forcing trades. This started as a textbook example of disciplined momentum trading.
However, after about a week and half of consistent profitability, I started losing control, trading on tilt.
And only now, before I turn my initial $10K capital into a negative return, am I taking a step back, looking at the mistakes I’ve made, and trying to figure out how to set things straight.
The Early Momentum (The Good Phase)
Key Metrics
- Starting capital: $10,000
- Peak equity: $15,000+
- ~50% gain in under two weeks
As I said, starting out, I was doing really good. I was waiting for 10% catalyst moves, which are part of my post-earnings momentum strategy. I was keeping an eye for momentum hourly candles and multi-frame confirmation breakouts/breakdowns.
This led to clean entries, high probability setups, and overall good trading that I felt proud of. That type of trading instilled confidence in my system. But it aso led me into feeling “in sync” with the market.
And that, my friends, can be a very slippery slope.
However, in hindsight, that early phase of trading my paper trading account worked because I stuck to discipline, not prediction. Execution over opinion… And that’s how the pros do it!
The Shift: When Confidence Turned Into Ego
So, what happened after that? Well, I started getting cocky after big wins. Even when I slipped a bit, bent the rules a bit, and made a big win, I let that go to my head. This led me to start increasing position size, overtrading, and taking trades without full confirmation.
I was no longer trading with discipline. I was guessing instead of reacting.
Natural, yet detrimental thoughts crept in…
- “I can’t miss right now.”
- “This one will work too.”
Revenge trading tendencies took precedence when good trade setups failed to follow through. And the urge to compound quickly led me into making bad choices.
The first few big losing trades should have been enough to stop me… but revenge… it’s a powerful motivator.
The Drawdown
So I started with $10,000 on February 6th, brought my account up to a peak of about $15,000+ and I’m not currently down to about ~$11,400. I’m still green overall. But down more than $3.5K… it’s been a painful regression.
Here’s the worst parts about my recent drawdown:
- Losses concentrated in just a few stocks – This wasn’t a few weeks of small losses that gradually wore away at my captial. It was just a few big losses, a few setups where I just couldn’t let myself be wrong.
- Oversizing was the real damage – Wanting to prove myself right led me mutliple times into taking large positions and far more risk than I’m supposed to be managing.
- Overleveraging magnified losses – When trading with a margin account, it’s easy to feel like you can average up or double down into a losing trade, especially when you’ve still got plenty of buying power available. But margin is often the exact problem that leads to margin calls.
The key takeway from all this is that a handful of bad decisions erased weeks of disciplined gains. It wasn’t death by 100 paper cuts. It was 3–5 oversized emotional trades that I knew to avoid, that could have been avoided, that led to all my stress, anxiety, and underperformance.
The Real Problem: Risk Management Drift
For me, it’s incredibly important to remind myself (and all of you reading this) that it wasn’t my strategy that failed. It wasn’t the unpredictability of the market, tariffs, or any other type of uncertainty that stole my capital.
It was poor risk management, poor emotional control, and ego.
When I failed to stick to my strategy, I started rushing into trades instead of waiting for the close of the hourly candle. When I traded without seeing multi-timeframe confirmation, I was taking low probability trades. And when I took an oversized position, even just a small 0.5% or 1% move against my position felt painful.
The setups just weren’t there. Yet I traded as if I was looking at the opportunity of a lifetime. When the low probability setup didn’t follow through, I then often took second and third trades on the same ticker AKA revenge trading.
So, again, it’s important to remember that the strategy didn’t fail. I failed to execute the strategy properly. And that’s a powerful distinction.
Emotional Analysis
Today, I find myself feeling frustrated, embarrassed, and disappointed. I am angry and I feel broken. I’ve been having moments of “maybe learning to trade is impossible.”
However, in the act of writing this trading journal performance review, I also find myself feeling awareness. The act of journaling reminds me that those big losses were avoidable.
They are still painful reminders. But empowering, nonetheless.
Because avoidable mistakes are correctable mistakes. And I truly believe that no trading loss is truly a loss when you can step back and learn a thing or two from it.
The Biggest Mistakes I’ve Been Making
I typically trade momentum and intraday percentage breakouts. This can be extremely lucrative setups. But they can also be volatile. They can reverse. And they can leave you standing there with the bag, wondering what the hell just happened.
That’s why it’s crucial that I stick to the strategy, which involves waiting for a +/-10% move, then entering at the close of the hourly candle IF the price has broken out on the hourly, 4-hour, or daily chart.
However, the biggest thing I’ve been doing wrong is that I haven’t been waiting for the close of the hourly candle. I’ve been seeing a price move, then rushing in, only for the candle to reverse, and leave me chasing it, trying to guess which direction the stock is moving.
Yet, each time this has happened, usually, had I waited until the close of that hourly candle, then placed my trade in the direction of that move, the trade would have worked out.
This just goes to show that execution is crucial. I know what to do. I just haven’t been doing it. And to make matters worse, I’ve been oversizing, which is guaranteed to leave me feeling awful when setups fail to follow through.
Looking back, this is nothing more than a stark reminder of why it’s important to following risk per trade rules, maximum exposure limits, and to only allow myself one-trade-per-setup.
What This Reveals About Trading Psychology
Some of the broader lessons I can glean for this poor performance:L
- Success creates risk.
- Confidence can morph into overconfidence quietly.
- Discipline erodes gradually, not instantly.
- Big gains often precede big givebacks when ego enters the picture.
You can even frame this as: “The Most Dangerous Part of Trading Is After You Start Winning.”
And I feel like that’s something a lot of traders can understand. Winning trades feel good. They release dopamine, adrenaline… You feel like you know EXACTLY what you’re doing when trades work out.
But I seen myself do this time and time again… I have a string of profitable trades, I start feeling confident, I break just one rule, then I spiral out of control.
It’s only human nature to feel this way when there’s money on the table.
However, with good risk management, these types of mistakes and drawdowns can be avoided.
Reset Plan (Recovery Protocol)
Looking forward, here’s how I plan to trade:
- Hard cap on position size – Every trade will only ever be $1000. If it’s a $50 stock, I buy no more than 20 shares. If it’s a $500 stock, I buy no more than 2.
- Strict 1–2 trades per setup maximum – If you get your entry wrong, it’s ok to either re-enter or to reverse your position… It’s when you do this 4, 5, 6, or 10 times on the same ticker that digs your P/L into a hole.
- Mandatory checklist before entry – Think about it before every trade… Is this an earnings mover? Did the hourly candle close +/-10%? Does the move coincide with a hourly, 4-hour or daily break of structure?
- Journal every trade in real time – Never let yourself stray too far from reviewing your performance. When losing badly or winning big, it’s easy to forget about the importance of journaling. Worse, when you’ve vaporized your capital, it can be hard to publicly announced that you’re F&@KED up… But it’s only through honest journaling and performance reviews that you leave.
The Silver Lining
I’m sitting here, feeling bad about myself. But it’s important to remain optimistic, even if the face of a big drawdown. Here’s what’s good about my recent performance.
- Account is still up ($10K → $11.4K)
- Mistakes happened in simulation, not live capital
- Strategy still statistically valid
- Risk management was the variable that failed
Drawdowns expose weaknesses. Weaknesses create refinement.
I’m not going to say this hasn’t hurt. But it reminds me of what I need to work on. And that’s important.
Final Reflection
Remember: Trading isn’t about how fast you can go from $10K to $15K. It’s about whether you can protect $15K once you get there.
Discipline compounds capital. Ego vaporizes gains.
The month isn’t even over yet, but my recent performance didn’t expose a broken strategy. It exposed a lapse in discipline.
And that’s something I can (and will) fix.
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