I’ve been involved in day trading on and off for over 20 years, and while there have been some changes, a lot in the retail space remains the same. Even with new rules and regulations, the changes haven’t made things any easier for the retail day trader.
For my 10th birthday, my parents gave me 10 shares of Exxon (XOM). They felt learning about investing at an early age was important. Even then, I was enthralled by the stock market and it continues to this day.
In 1999, I was young, fairly aggressive, and dipping my toe in one of the hottest stock markets ever. The dot-com stock market had everyone rushing to open their own trading accounts– including me.
I opened an account at a company called Datek Online, which was later acquired by TD Ameritrade in 2002. I wasn’t day trading at the time; instead, I was looking for long-term holds on stocks that were rising at warp speed. Being so young and aggressive, I didn’t sell anything. This turned out to be a big mistake and one I'll never forget.
In 2001, as the market was starting to implode, now known as the dot-com bubble, I decided to open up a day trading account at TradeStation. I was paying significant commissions and found myself up against the best traders in the world without a clue what I was doing. Additionally, technology was newer, and I was running my day trading using a PC with 3 CRT monitors on a DSL line. Speed wasn’t in my favor.
Eventually, I realized that I needed some guidance. I got hooked up with a trading chat room, where Raymond Deux just happened to be the owner. At the time, he was a very sophisticated trader who really loved talking about technical analysis. I was trading with about 50 people and, little did I know, I was in a Forrest Gump moment: Several years later, the flagship software company Ninja Trader was founded by Raymond.
To make a long story short, my initial experience with day trading was pretty rough. High commissions, slow Internet, no diversification, and basically not having a clue what I was doing all contributed to my Datek/TD account dropping down about 80%.
The fallout of the dot-com bubble wasn't pretty for a lot of people. In fact, it was this crash that, in February 2001, prompted the PDT rule. This rule changed day trading forever. And while I did take some time off, that didn’t temper my interest in the markets.
Around 2005, I found Forex. Forex was the Wild West landscape of trading without many rules. The lack of regulation didn’t really excite me, and I didn’t last long. Then around 2007, I found the Futures market. As a retail futures trader trading the E-Mini S&P 500, I was definitely out of my league. I traded with Interactive Brokers using NinjaTrader for charts and order entry. This stint in the futures market was also short-lived. I was a retail trader going up against the pros and I lost.
Fast forward 13 years to 2020. We’re surviving a pandemic that changed the retail trading landscape forever. After my main business took a big hit, I felt that this was my opportunity to get back in the game. I opened a new TradeStation account, studied and learned from 3 professional traders, and received commission-free trades. Currently, I’m officially making money as a retail trader. I have a long way to go and a lot to learn. But I’ve always been drawn to the market and it has a way of pulling me back in.
As with most things in our world, retail trading will most likely continue to evolve. The ride of 2020 brought with it many new retail traders. The question remains: how many will last? Hopefully, the young traders will be able to take some profits, continue to learn, and grow with the landscape.
As a trader, I’ve learned a lot over the years and if there’s 1 piece of advice I can offer, it’s this: always be prepared for the unexpected.
You can read more about my day trading journey and be part of the next story on the Afternoongrind.com.