Why I Quit Day Trading: A Journey from Illusion to Realization

Day trading—it’s an enticing world, isn’t it? The allure of making millions, retiring young, and living a life of luxury is everywhere. I know, because I fell for it. This is my story—a journey from the high of doubling my capital in two weeks to the sobering realization that the market doesn’t play favorites.

What’s Ahead

• How It All Began
• The Turning Point
• The Realization
• Refocusing on My True Goals
• Moving Forward
• Additional resources

How It All Began

Like many others, I was captivated by YouTubers who seemed to live the dream: luxurious lifestyles funded by day trading, complete with exotic cars, vacations, and an air of effortless success. They shared tips on reading charts, emphasized discipline, and showed how trading changed their lives. Inspired, I became a graduate of the “YouTube Academy,” ready to conquer the markets with excitement.

And guess what? My first trades were phenomenal. I doubled my capital in just two weeks, making more in a day than my weekly salary. It felt incredible. I started believing I had control—that I had cracked the code.

The Turning Point

Then came the losses. My confidence wavered as I faced my first significant setback. Instead of following the disciplined strategies those YouTubers preached, I let my emotions take over. I turned into a gambler, chasing losses with the hope that “just one more trade” would make everything right. Some days, it worked. Most days, it didn’t.

I ignored stop-loss rules, let emotions cloud my judgment, and regretted every decision while still diving back in. As a Singaporean trading the U.S. market, I’d sit up late, letting sleepless nights bleed into my daily life. My mood darkened, my work suffered, and I became distant from my girlfriend (now wife). The stress of trading was eroding not just my finances but my relationships.

To me, back then, day trading didn’t seem that hard. Read the charts, guess whether it’ll go up or down—it felt like a 50-50 game. But soon, I realized it’s much more than that. It requires discipline: knowing when to enter, how much to risk, where to exit for a gain, and when to cut your losses. The toughest part? Resisting the urge to keep diving in when you’re winning, thinking the momentum will stay on your side. And, on the flip side, resisting the desperation to recover losses by betting against logic. I caught myself multiple times in these traps, and let me tell you—it usually ended badly.

There were also times I felt like an idiot, staring at the charts as if my Jedi Force could push the needle up or down. Spoiler alert: it didn’t work.

The Realization

One night, I asked myself: Is this worth it? I thought about my commitments, my relationship, and the years of savings I was risking. Why was I letting the market dictate my emotions and decisions?

I began questioning those glamorous YouTubers. Were they truly making fortunes, or were they simply selling an illusion? It’s easy to share success stories, but who wants to watch a YouTuber losing money daily? Social media thrives on curated content, and these influencers often show us only what they want us to see—the highs, not the lows. It’s like travel influencers posting exotic trips, creating the impression of a carefree, glamorous lifestyle. Yet, behind those picturesque posts lies the untold reality of working long hours in an office just to save enough for the next vacation. This parallel applies to finance influencers who often showcase their wins while leaving out the grueling effort, losses, and stress that can dominate their day-to-day lives.

The hard truth is that the success rate for day trading is shockingly low. Studies have shown that only about 4% of day traders achieve consistent profitability, and even fewer can make a living from it. (Source: University of California Study) For instance, a study conducted by the São Paulo School of Economics analyzed over 19,000 day traders in Brazil and found that only 1.1% earned more than the minimum wage. (Source: Sao Paulo School of Economics Study) This underscores the steep challenges inherent in day trading. The stock market is a zero-sum game: for every winner, there’s a loser. And let’s not forget the brokers, who consistently profit regardless of who wins or loses, taking a slice from the winners and compounding losses for the losers.

Refocusing on My True Goals

I decided to take a step back and redefine what I truly wanted:

• Retire earlier than expected.
• Take a few vacations annually.
• Build investments that generate passive income to support my retirement.
• Sleep peacefully, knowing my money isn’t at risk overnight.
• Enjoy life with minimal effort and without being consumed by market fluctuations.

I realized these goals were achievable through methods like value investing, selling options, and selectively investing in promising growth stocks or companies. The beauty of these strategies is that while I sleep, my money is working for me—no sleepless nights required.

I managed to exit day trading while still maintaining a handsome amount of gains. Do I miss the excitement? Sure, who doesn’t enjoy the thrill of potentially becoming rich overnight? But I know myself. Even if I could succeed in day trading, it would bring unnecessary stress and risk that I don’t want. Personal finance is about understanding your risk appetite, reviewing your resources, and finding what fits your profile.

Lessons Learned and Advice for Aspiring Day Traders

If you’re considering day trading, here’s my take:

1. Start Small and Manage Risks: Never risk more than you can afford to lose. Use stop-loss orders and stick to the 1% rule—don’t risk more than 1% of your capital on a single trade.
2. Educate Yourself: Learn the mechanics of day trading and practice with a demo account before using real money.
3. Have a Plan: Develop a trading strategy and stick to it. Avoid impulsive decisions driven by emotions.
4. Prepare for Losses: Understand that losses are part of the game. Even the best traders don’t win every time.
5. Question the Glamour: Be skeptical of influencers showing only their wins. Remember, curated success stories don’t reflect reality.

Moving Forward

Now, I’m exploring various investment strategies, including value investing, growth stocks, and the wheel option strategy. Here on Fynancio, I document my journey—sharing not just the wins but also the mistakes. Investment isn’t about getting rich quick; it’s about aligning with your goals and understanding yourself.

I hope you all take this to heart: there’s no such thing as getting rich without taking risks. For example, consider the allure of leveraging all your savings on a single stock or trade. While the reward could be substantial, the risk of losing everything is equally high. A balanced approach, like diversifying investments or setting clear stop-loss limits, can help mitigate risks while still aiming for growth. Finding this balance is key to long-term success in any financial journey. But not everyone is suited to the same risks because we’re all in different situations. Never take financial advice from someone who doesn’t know you, and even your closest friends’ methods may not work for you. All investment planning starts with understanding yourself. So take your time, do your research, and make decisions that align with your life’s unique path.

Additional Resources

• University of California Study
• São Paulo School of Economics Study

** Disclaimer: some of the references links provided are for the source of reference purposes and do not imply any relationship or partnership with the website or their owners.

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