Saturday, July 11, 2015

Life Cycle of Trading Blogs

In the past I blogged about the scarcity of personal trading blogs, and the difficulty of finding US based trading blogs in general on the Web. For the trading blogs found, they typically go through the following stages of existence:

1) The Introduction

The start of a trading blog is very similar to any blog in general- a brief introduction followed by what they intend to write about. There we see one big split among trading blog intros:
a) Normal
b) Attention Grabber/Proclamation

Normal intros just state their case that it will be a blog on trading without much fanfare. The "proclamation" intro makes a big claim about intended performance that attracts attention from others. An example of attention grabbing blog intros:
I'm new to trading, but will try to make big bucks from my modest account.
These fall under claims such as someone starting with around $30K, and saying they plan on building it up past a million bucks over time. Some even put a time limit on this feat to add to the pressure of achieving it. Mind you every trader is aware of (or at least should be) the high rates of failure in day trading and the corresponding low rates of success. Hope springs eternal with new traders. =) Another example would be someone saying they will double their money on a regular basis over time.
It's fair to say even those who make far more modest claims privately hope to achieve these type of results, but don't wish to be judged by that bar level.

2) The Activity Phase

Here is where the actual blogs of traders put their plans into action. Results here invariably follow the reality of low success probabilities with the majority of trading results being mediocre at best or losing big sums of money at worst. There are a few rare ones that show high promise with successful results with at least a positive balance over time. The successful ones attract a good amount of attention since they are few in number.

3) The End Phase

Trading blogs reach a point in time where they mostly end in one of the following ways:

a) Blowing up- when a day trader loses all their money and can no longer trade. The odds favorite for this type of scenario typically goes to the blogs that make those big proclamations of making big bucks fast. This makes sense since the pressure to perform results in greater risks being taken. A side effect of many "blow up" blogs is their sudden disappearance, as in the blog will be taken offline as if to erase the past.

b) Abandonment- this is the typical path most blogs of all types take. Blogs become less frequent over time and eventually stop with no official ending.

c) Official Hiatus - When a trader decides to take some time off to work on their system due to lack of performance expectations. The majority of these don't return.

These above three are the most common ways trading blogs end. Here are the extremely rare ones:

d) Officially Giving Up- Trader admits day trading is too hard to master and actually calls it quits. No one like to admit defeat so this makes sense.

e) Successfully Retired- When a trader successfully trades the market over time and eventually retires the blog to move on to other ventures and generally enjoying the lifestyle successful day trading provides. As expected, this is the rarest of all endings.

I've seen some short term successful trading blogs stop blogging, but I've never seen one that showed their continued success over a significant amount of time like at least a year or more of consistent high profits, which justified their reasons to stop blogging along with a formal ending saying they were moving on. Just to be clear, I'm referring to personal trading blogs and not commercial ones of any individuals selling training courses or systems of some sort.

Of course, that's not to suggest successful non professional traders don't exist, just that many likely don't blog.  Here's an example of one of the best past blogs I've seen chronicling the performance of traders that don't blog: Link

An example of an extremely successful personal blogging trader is Michael Burry, a medical doctor who traded/blogged during his off time as a hobby. He eventually created a hedge fund and scored huge on his correct market calls during the 2008/2009 market crash.

3 comments:

Sandy said...

Do not waste time by polluting your thoughts with the contemplation of others. Breakthroughs can only be sustained by cultivating your own curiosity (unbridled by the illogical ruminations of other retail; and quite likely, unprofitable traders)

This post of yours is waste of your precious time (if you are a serious trader).

However, you HAVE hit it on the head - consistently profitable traders are very unlikely to post public blogs.

But to assume that lack of such blogs is proof of lack of such traders is not only a stretch but also incorrect inference.

Soullfire said...

@Sandy

True, these posts do take some time to create, but blogging is one of the avenues I use as a break from focusing on trading- along the same lines as exercise, reading, etc...

I find that taking an occasional time out for less thought intensive activities serves as a refresher and helps with approaching problems from different perspectives upon resumption of concentrating of trading.

To tell the truth, some of my biggest "aha!" moments came when I was in the middle of juggling non trader tasks and these thoughts of new ideas would materialize.

This post is based on what I have seen over the years of what becomes of "Trading Blogs".

"But to assume that lack of such blogs is proof of lack of such traders is not only a stretch but also incorrect inference."

I'm not sure what you mean - I stated that the lack of any "known" retired successful personal trading blogs is NOT proof that successful home traders don't exist, just more likely that they don't blog. I think we are saying the same thing.

I also gave some examples of successful traders who don't blog.

You yourself previously hosted a successful trading blog which was quite informative. I believe even though blogging can take away time from focusing on trading, it serves a purpose of showing people that it is possible to do this at home if one has the time and dedication. I found seeing the blogs of successful traders to be quite inspirational during a time when I was really struggling and beginning to wonder if it was still possible for a person to successfully trade on a small scale.

Ayumi said...

Nice observations.
I could see many traders who used to blog during my time has either moved on, stop trading, says they plan for a come-back, or just like me, blog less.

I am happy to read your regular blog post.