Happy New Year!
2017 is over and I am taking some time to review how it went and what my plans and goals are for 2018. Overall, I am happy with 2017. I grew a lot as a trader. The area of trading I've enjoyed the most has been options trading. I've also grown my account significantly. These factors are bringing a lot of change to my trading in 2018 vs how I started things off last year.
A big component of my account growth has been taking a day job. The name of this blog is about what I want to be, but to get there I need a bigger account. The job is a double-benefit. First, it allows me to add capital to the trading account every month. This is the best and most reliable way to grow a small account. Ignore the instagram millionaires who claim otherwise. The second benefit of a job is that I typically kept all of my trading gains in the account since I did not need to "draw salary" off of it. My only regret is that I didn't take a job sooner.
My trading gains were also quite substantial in percentage terms. In the following chart, which runs from March 2016 through the end of 2017, I am up 75% in my trading account. This adjusts out deposits and withdrawls, so it does not include the additions from my day job. I am very very happy with the returns, but I would like to see a smoother equity curve.
Especially concerning is that big drawdown near the end. This was from a particularly volatile strategy and I was trading it way too big for the account. Overall, that strategy did make money for me but it is one I am retiring for 2018. Most people would not be comfortable trading through a 50% drawdown.
At the start of 2018, my account is effectively at $100k. I've heard many traders describe this as a kind of psychological barrier. When they grew much past $100k they started trading poorly and gave back their gains. It takes time to stretch your brain to work with the 6-figure account. So, I've decided to cap it at that level at least for the start of the year. Each month, I will draw any amount over $100k off the account.
New Years Goals
These are my goals for 2018, sort of my "new years' resolutions":
Make 25% return adjusting for additions/withdrawls
Kind of a no-brainer. My average has been well over this, but my returns have been too volatile. So, really, I want to make 25% while reducing the noise in my equity curve. Trading for income is very different from trading for growth and I want to start transitioning now.
I've struggled with my weight all of my adult life. I've dieted back down to 108kg and for 2018 I want to get down to 95kg or less. I am 6'2".
Max Out Retirement Contributions
In addition to building my account, I also put money into retirement in 2017. For 2018, I want to make the maximum contribution. Having a job with a 401k program gives me a chance to save far more aggressively into tax free accounts than I'll be able to as a nomad. As an aside, my retirement accounts are all in various index funds and a small set of value stocks.