Learn from my mistakes
Every lesson cost me something.
Here are the receipts.
I'm building a trading algo live, with real money. Each lesson below is one thing it taught me: the real numbers, the Short where I explain it, and what you can take from it without paying for it yourself.
- 01
Fees & costs· interactive
I have to win 2 of every 3 trades just to break even
35 fills · $58 gross · $122 in costs · −$64 net
$122 in costs
1,017 views
- 02
Risk & reward· interactive
My winners are smaller than my risk, on purpose
~$100 risked per trade · a clean winner makes a little over half
by design
1,154 views
- 03
Risk & reward
I won 3 out of 4 trades and made $9
+$45 · +$33 · +$43 · −$112 = +$9
one −$112 loser
513 views
- 04
Rules that backfired
A stop rule that sounded smart would have cut my profit from $130 to $6
replayed on 33 real fills · gross $130 → $6 · win rate 79% → 67%
would've cost $124 (replay)
660 views
- 05
Discipline
My algo made $114 by 4 AM, so I made it stop
17 signals blocked on 8 stocks · ~$85–90 left on the table
~$85–90 left
1,157 views
- 06
Discipline
I overrode my algo. It hit the full target anyway
half off at target 1, stop to break-even, then I moved the target myself
the rest of the move
484 views
- 07
Filters
My algo skipped 5 trades that hit their targets
~12 skipped signals, paper-traded · 5 lost · 2 a little green · 5 hit target
5 winners skipped
310 views
- 08
Risk & reward
Half my trade got stopped out and it still made money
VBIO short · half off at target 1 · other half stopped just above entry · ~+$14
kept ~$14
117 views
- 09
Fees & costs· interactive
Fees took almost half of my winning day
4 trades · 3 winners · ~$54 before costs · kept ~$29
~$25 in costs
650 views
- 10
Risk & reward
Getting in first cost me $105
live in at 84¢, tighter stop · paper in at 91¢ · spike to $1.05
−$105 on the live trade
274 views
- 11
Fees & costs
My algo found 4 winning trades and I couldn't take one
AIXI · 4 signals · 2 borrow too expensive · 2 no shares · paper 4 for 4
4 winners missed
260 views
- 12
Filters
My filter threw out 4 trades and it was right
AMOD · 4 skipped · paper took 3, all stopped out · cost one LGHL winner
1 winner for 3 losers
584 views
- 13
Risk & reward
My algo won 12 of 18 trades and the week made $9
−$23 · −$105 · +$29 · −$37 · +$144 = +$9
5 full stop-outs
379 views
- 14
Filters
All 7 of my losing trades had big news
KOD Phase 3 · SOAR $1.17B orders · SLND $71M contract · 7 of 7 losers
7 losers
73 views
- 15
Filters
Both trades had big news. One lost $139
BEAT −$139 · ALEC +$159 · both shorted right after big news
−$139 on BEAT
142 views
- 16
Discipline
I moved my stop 3 times and it cost me $36
IPDN · half off · stop tightened by hand 3× · still made $140
~$36 left
141 views
- 17
Rules that backfired
Tighter stops did worse on my trades
backtest at the same dollar risk · more shares, more fees · winners cut early
did worse (backtest)
546 views
- 18
Rules that backfired
I tested 90,000 versions of a trading idea
best version won 53% in testing · 34% on a year it had never seen · 158 trades
stays on paper
1,265 views
- 19
Risk & reward
My algo won 2 of every 3 trades and still lost 5 in a row
Sept 16–17 · 5 straight losers · ~$440 before fees · about 1 in 6 odds
~$440 before fees
864 views
- 20
Rules that backfired
A breakeven stop would have thrown out 40 to 70% of my winners
40–70% of winners pulled back to entry first · lost money on 5 of 6 setups
lost on 5 of 6 setups
1,061 views
- 21
Rules that backfired
I tested cutting losers early. It lost money
~260 simulated trades · half start against me · ~6 in 10 of those still win
lost every time (test)
195 views
- 22
Fees & costs
My algo said I paid about $209 in fees. My broker said about $155
algo ~$209 · statement ~$155 · two mistakes pulling opposite ways
~$209 vs ~$155
303 views
Not my trades
Market history
Famous market events and studies, with the real numbers and the Short where I explain each one.
- 01
Accenture's bids fell from $30 to 1 cent in 7 seconds
May 6, 2010 · ~$30 → 1¢ in 7 seconds · stub quotes
1,067 views
- 02
28% of players went bust betting on a coin that landed heads 60% of the time
61 people · $25 each · 60% coin · 28% went bust
424 views
- 03
$100 in SPY becomes about $1,400 when only holding overnight
since 1993 · overnight only ~$1,400 · market hours only ~$130 · backtest
518 views
- 04
A short squeeze took Volkswagen from about €210 to over €1,000 in 2 trading days
2008 · ~€210 → over €1,000 · at most ~6% left to buy · ~12.8% on loan
1,025 views
- 05
97% of people who day traded Brazil's index futures for 300+ days lost money
lasted 300+ days · 97% lost money · under 1 in 100 beat a bank teller's pay
445 views
Get the next lesson first
Each one starts as a Short. Follow along to see the next one before it lands here.