What I Learned From Making $172,083 In A Month From Day Trading

So what have I Learned from making $172,000 a month from day trading in 2020? What's going on, guys? Welcome back to another video. So if you guys saw the video I posted a few days ago, I basically logged into my trading account, showcased my profits for the year, which were a little over $2 million. After showing that, a lot of people started DMing me and hitting me up and saying, hey, can you share something with us? Something you've learned, a few things that you can point us to the right direction on how we can get to a certain level. What does it require to make a million, 2 million, 3 million or whatever from trading a year? So I was like, you know what? Let me make a video, a quick video just to kind of share my insights, share my experiences with you guys and just kind of take it from there. Now, if you guys haven't seen the video, just I'll probably post it somewhere here. You guys can click on it and see that video if you already seen it. Let's get started. Now, first things first, I want to be crystal clear with this number. $172,000 a month. That's the first thing I want to focus on, right? The first thing I want to focus on is the $172,000 a month in trading, guys, right? I want you to understand this, that trading, you're not gonna have consistent months. Yes. In the title, it says how I made $172,000 a month. And honestly, I didn't really make $172,000 a month. I have had months where I made 300,000, 400,000. I've had months where I made 50,000. I've had months Where I made 25,000amonth. Now, at the end of the year equates to about 2 million, but that on a monthly basis is 172,000. But my point is that you as a trader, you're not going to have consistent months, day trading. Like, I haven't personally seen anyone do it. It doesn't happen with me. So maybe someone is making the same 10, 20, 30 grand a month, but for me, I haven't seen it. So what I've seen in trading, and this is the first thing I want you guys to understand before I dive into the four topics that I want to focus on. Number one, you're not gonna have, you know, consistent 10k, 20k. Like, trading is not that sort of business where you can scale, right? Where you'll have a month where you make 10k, then you're like, next month I want to make 20, then I want to make 30, then I want to make 40. Trading doesn't look like that. That's not how a P and L is going to look like. I haven't seen anyone's equity curve even look like that. And even the past seven, eight years that I've been trading, my P and L has always looked like that, right? Where I've had months where I barely broke even, I have months where I had phenomenal months, I've had months where I had terrible months. You know what I mean? So the point is, as a trader, the first thing you want to understand is you're not gonna have consistency from the markets. And I think that's one thing that psychologically messes a lot of traders up. And that's one thing I want you guys to really understand. And what I mean by that is you'll have a day or you'll have a month where you'll clear, let's say, 20 grand, right? And I've had that. I've had months this month. Like, if you guys have been following my journey, especially In February of 2020, I had my biggest month, which was a little over a million dollars, and then things started going downhill, and then I've had months where I made maybe ten grand. You know what I mean? So the way that psychologically messes with you is imagine you have one month where you made 20 grand, let's say in January. We're in January, so January you make 20 grand. Great. Phenomenal. You're happy. Now next month, based on what you trade, based on your trading strategy, whatever the case may be, the market may not be giving you the same opportunities it gave you in January. Now, mentally, what people do is people say, you know What? I made 20 grand in January, I need to make 20 grand in February, or I need to make more. So now they start taking trades because of that financial number, and because of that financial number, the trades they start taking messes them up. But in reality, the way your P and L may look in February, you might make 5k, and then April, you might make, I mean, March, you might make 2k. Then April comes and you make 40k. You know what I mean? Now, I know there's some traders that may come off with this and say, oh, well, that's not consistency. That's not showing any sort of consistency in the markets. But you have to understand, it's like, this is what's going to happen in trading. You're not going to get the consistent Months. And this psychologically messes with those traders, right? And understanding that is going to help in the long run. And this is one of the points that I put here is you have to treat trading like a business, right? And I'll dive into that in a minute, but it has to be treated like a business. If it's not treated like a business, you will ultimately fail. Right. Now, before diving into that, let's dive into point number one. Now, a few things I've learned, like I've knew this before, but I kind of went into a little bit more is for all traders that are starting, you have to understand that your trading success, everyone thinks it looks like this, right? But trading success is going to look like that. And even me, I have that. I've had that this year where, you know, I felt in months where I knew everything and then I months where I felt like I had no confidence and things were going bad. But you have to understand, trading is a game where you are constantly learning. And for you to perform at a high level, you have to be constantly tweaking and be on top of your game. If you're not on top of your game and you're not constantly tweaking, you will start having major, major problems as a trader, right? And you have to understand that you're going to go through situations where you have two weeks of good trading and then one hiccup. Now when that hiccup happens, you need to be very well aware of what's going on and you have to be able to pick yourself back up and tweak and adjust with the markets. And I've seen that happen with myself too this year where I would have great week, a great month, markets would shift. Maybe something would shift in my personal life, maybe something would shift overall that starts affecting my trading. And if you don't pick up on it quick enough, what will start happening from a psychological standpoint of view is your trading is going to start taking a hit. And once your trading starts taking a hit, if you don't take that break, if you don't take that necessary amount of time required to get yourself back up, what you're going to do is you're going to destroy your whole account, right? So that, that's a very major thing to understand. Part of the trader's journey, the traders journey, guys, never ends. Like it's never going to end. No matter what, you're always going to be on the trader's journey. I'm still on it. People trading for 30 years are still on it does not matter. You just have to understand that that journey is going to take time and you have to constantly make adjustments. The journey does not ever end. Like, if you have been trading for a year and things have been going well for two months, there's going to be a time where things are going to start going bad. And that's where you need to understand. I'm still in the trader's journey. I'm forever going to be on this. And when things go south, I need to pick myself back up, understand the problem, fix it, and then come back stronger. Now, when things do go wrong, another thing I want to talk about, when you're trading and let's say you're having a good week, a good month, and things start going bad, size down, take less size, right? Take smaller positions. Because what people do wrong is, is they'll be sizing average here. And then when things go bad, they start increasing their size, which increases their drawdown. So what happens to their drawdowns is their drawdowns become major and they start blowing accounts and blowing money. So be super well aware, be super self aware of this going into 2021. Right? Second thing I want to talk about, right, Let me just show this one more time. So this is what it looks like, guys, one more time. Like process this in your head. Like, trading is not going to be a straight game up. Like, that's not going to happen. You're going to have hiccups, you're going to have hits. When you have hits, right? When it gets messy in the middle, learn to pick yourself back up. Learn to take a break. Sometimes taking a break is one of the best things you can do for yourself as a trader. Okay, now, second point, treating trading like a business. Now, before I continue, if you guys can just take a minute and give this video a thumbs up and like it, I would genuinely really appreciate that. I'm just trying to get the YouTube algo going up and just have this video go out more. So if you guys can take one second just like it, I would genuinely appreciate that. If not, it's totally fine. All right, so treating trading like a business, second thing that I think everyone should focus on, you need to treat this like a business. Now, treating this like a business comes down to point number three, understanding your edge and when to take positions. So I'll give you guys a perfect example, right? Let's say you have a pizzeria, you have a store, you sell pizzas, right? This is your bread and butter. You make money by selling pizzas. Right? It costs you 50 cents to make. Not even 50 cents. Let's say it costs you $2 to make a pie. And you sell a pie for 20 bucks, right? This is where your profit is. You make $18 on a pie. You know that this is what I'm going to focus on. I have the equipment, I have the staff, I have the processes, I have the procedures to actually make proper pizzas. Right now in trading, we have the same thing. We have a certain strategy. We have something, our bread and butter, that makes us the most money. And when that opportunity presents itself, we as traders are going to step in and take that position. Right? Now imagine you're a pizzeria and someone comes to you and says, hey, I like, do you guys sell, do you guys sell steak? Right now you don't have the equipment to make a steak. You don't have the staff that is well equipped to know how to cook a steak, right? And you don't have the ingredients to kind of season it or whatever needs to be done on the steak, right? So now imagine the time that's going to take for you to kind of take this position or learn this. Opposed to you just focusing on making pizzas. Now when you take this position, you're not trained, equipped or anything based on your strategy, based on what your business is focused on to be able to execute this at a high level. Now what you do is on this, your profit margin might be $5, right? Because you don't have the machines or equipment or the oven or whatever to cook a steak. You don't have the proper meat. You have to go out and speak to a different vendor. Let's just look at it from that perspective, right? At that point, what's happening, right, is you're over complicating your trading, you're over complicating your business, and you're doing everything in your business. Now, once you start doing everything, you don't have a high profit margin item. That's your bread and butter. So you're trading at that point, it's all over the place. You're not looking to be the best pizzeria company in the world. You're looking to be someone just trying to make a quick buck. And when that happens, in the long run, it never works out. Same thing in trading, right? If this is your strategy and day two, your strategy is not presenting an opportunity. No one's coming to buy a pizza. You're not gonna just say, all right, today I'll sell lemonade. Cause no one's Buying pizza. Today, I'm gonna sell steak because no one's buying pizza. No, you're gonna say, maybe it's not the season. When the season does come, I will take advantage. When the day does come, I will take advantage. Because if I start focusing on, let's say, making a steak, and since I don't know how to make a steak that Well, I lose $5. Then, I lose $10. Now I start losing money in my business because I'm creating, making stakes. Now, when the opportunity presents itself for someone looking to order 100 pies and I have a good trade set up, I'm going to be scared on taking that trade because I already lost a good amount of money. So I'm like, I don't know if I should take orders of 100 pizzas right now because I've been messing up. Yeah, no, no. I've been messing up because I've been making steak. My company, my store makes pizzerias, makes pizzas, Right? So that's the same thing with trading. People have a strategy. They focus on one way of trading, and then they see in a group chat or on Twitter or Instagram that this person's buying this or this person's buying that, and they say, you know what? Maybe if I buy this too, I'll make money. They take that trade, they lose money, and then they just start going on a downward spiral. And I'm pretty sure you guys can connect. Cause I've been through this multiple times. You know where I sit in front of a computer, I get bored, and I'm like, you know what? Let me take this position. Screw it, Let me take it. I'll make money. And the next thing that happens is that position, be it I make money or don't make money, it affects me in the long run. Because even if I make money the first time and the second time, eventually you start losing money. And that always messes up your original bread and butter. Now, if you don't have an edge, you don't know what you want to trade, you don't know what you want to sell, great, that's fine. That's gonna take time for you to understand. But I'm saying, if you did get to a point of having a proven strategy or a proven way to trade, if you're trading options, you're scalping premiums, you're trading small caps, big caps, whatever, you're shorting penny stocks, whatever it is that you're doing, focus on that. And if the opportunity does not present itself, that is Fine. If the opportunity does present itself, you'll have big months, right? Your P and L may look like this, but what matters is at the end of the year, how your P and L is. But if you try to duplicate every single month on being a successful trader or profitable trader, you will in the long run keep losing money. And I'm pretty sure a lot of people watching this can relate that has happened. And if I'm wrong, tell me right now, right? Next thing I kind of want to point out, which I think is very important capital requirement, right? I think a lot of people see on YouTube or Instagram or whatever that, okay, this guy made $2 million, right? Wow. I want to make 2 million right now. You got to understand a few things. Let me break down a few things. Number one, I started with 200k on this account, right? Even. Even for 20, 21, the new account I'm starting, 200k. And the reason people and people ask me, oh, why not start with half a million? Why not start with 2 million, you know, 5x10x that? Yeah. Because sizing up and trading is hard. It's not an easy thing to do. Like, there's a certain amount of position you can take mentally, and if you take a bigger position mentally, it affects you no matter how good of a trader you are. It just happens. Like, I know if I go in, let's say, and I buy 5,000 shares or I put 500k in a position, which didn't work out this year, right? I put 500k in a position or I put 100k in a position, me managing the 100k position is going to be a lot easier mentally than managing the 500k, even though it's the same trade. But you have to understand in the 500k position, when a stock really makes a small move down, your P and L takes a drastic hit compared to the 100k position. That's why that position sizing really, really plays a huge role in trading. Now, what I mean by capital requirements and experience is number one on me. I started with 200K, right. And second, I've been trading for about seven years now, right? So now that's not to tell you that it's going to take you seven years to be successful. It took me about two and a half years. Two years. But it's to kind of put things into context for you, right? And putting things in context for you is you need to understand that your trading is basically you. That comes down to how much capital you have, right? Your trading Style, right? Your risk tolerance. Do you have a high risk tolerance? Do you have low risk tolerance? How well are you in execution? How well are you in executing trades? How is your mental model? How are you on a psychological level? Right? Now, when I say on a psychological level, this is very. This, to me is by far the most important thing in trading. It's how do you deal with losses? How do you deal with profits? How do you deal with all of that, right? Because you have to understand, you can look at someone and say, oh, well, this person made 100k, this person made 2 million. This person made 5 million. But underneath that profit, underneath that P and L, there's a lot of mental struggles that we go through. And I'll give you one. For example, right? Think about it. How many times have you been in a position where you said, okay, I'll buy the stock at 90 bucks. If it goes to 85, I'll sell. Stock goes to 85. And you're like, oh, man, I'll wait till 84. It goes to 84. I'll wait till 80, right? And you end up losing way more than you should have. Or how many times have you gotten into positions? And the position was that, let's say you got in at 100 and you said, you know what? If it goes to 105, I'll sell. And it goes to 102, and you see a little bit. A little bit green on your P and L, and you're like, take profit, take profit. And then it goes to 105 and you're like, oh, man. And then you rebuy at 105 and it dumps, right? And that's what I mean by the psychological level. That's what I mean by treating it like a business, right? Because there's certain things that I think we as traders, and this is like, I think a big, big one. There's certain things that I think we as traders have to go through. Like, I can sit here all day and I can talk about these things and I can say, this is what you should do. You have to understand, blah, blah, blah. All this doesn't matter. It does not matter. Because when you're in front of your computer screen and you're trading, half of these things are not gonna be there. They're gonna be there. Once you mess up and once you feel that pain and it sticks with you, like, oh, man, I remember I did that. And I know how it felt and I know the reality of it. That starts connecting more, which is why I tell People, listen. When you start trading, don't open an account tomorrow with so much money. Start off small and focus on the process. For all the new people starting out or even the people that recently started. Just, just hear this out. Focus on the process of trading. That's it. Don't focus on. All right, like, people DM me and they ask me, hey, Umar, if I, if I, if I start with a thousand dollars tomorrow, how much money can I make? I'm sorry, I think that's a very, very dumb question. That's not a question. Like, if I. Whenever someone messages me that or ask that question, I ignore it. Like, it's. It's like, that's not the right way to go. Like, first and foremost, it's impossible for anyone to answer that, including yourself. Right. Second, that's not what the focus should be on. The focus should not be on, if I open an account tomorrow of 10,000, how much can I make? I don't know. Like, do you know what your edge is? Do you know how you react when you make money? Do you know how you react when you lose money? Do you know how you react when you have a terrible month? Do you know how you react? Like, you don't even know these things. Like, you haven't went through that experience aspect for you to answer that. So why is that financial goal even in front of, like, why are you even thinking that? You know what I mean? Like, that shouldn't be there. And for all the traders that do that, that focus on that, in my opinion, don't make it because they start an account and they're like, okay, I started with the 1k because I saw this guy on Reddit or YouTube took. He took a 1k count of 50k. I want to do the same thing. I mean, to be honest, people that took 1k accounts to 50ks on. On buying overnight option plays.

It'S not. That's not trading. Like, even me, if I, If I put 200k into, you know, swing trade on buying spy calls or Tesla calls, and Tesla magically goes to 1000 bucks. Anyway, that's not trading. That is not trading. I'm sorry, Trading is you actively buying and selling a security based on a solid edge. And that comes with experience. So going back to what I was saying is, you want to start out, right? Focus on the process. There are certain questions you need to ask. Okay, what am I going to trade? Am I trading stocks? Am I trading options? Okay, if I'm trading options, which I don't think anyone should start off, Trading options. Do I know price action? Do I know when I'm gonna get in? Do I know why I'm gonna get out? Do I actually follow that? Right? Because you can say, oh, I'll get in if the stock does X, Y and Z. But a lot of times stock might do X, Y and Z. And you're like, oh, man, I'm scared to get in. Or you'll say, you know, if I get in and the stock goes down here, I'll sell for a loss. Are you selling for a loss? Are you accepting losses? You know what I mean? So those are things you need to go through. Those are things you need to understand. You need to understand the market as a whole. And this can take months. There's people that have done it in three, four months, two months, and that's phenomenal. Like I said before, it took me two years, two and a half years about to really get consistent. But if you can understand that, you can understand, you know, what you're trading, how are you going to trade it? Understanding, you know, how to find stocks that I'm going to trade for the day, what I'm looking for, what's going to be my entry point, what's going to be my exit point, am I following my plan? You know, how do I react on certain, certain components that itself is gonna help you out more. So for 20, 21, my advice to anyone looking to get started or have started, don't set that financial goal. Don't say, I wanna make 100k, I wanna make 200. No, if you're starting out, that should be the last thing on your mind. You wanna go through this journey of experiences to build up. And if you go through that, that will allow you to be successful because you need to go through that, right? The trade I went through this year of losing about a half a million on Spy. I know, terrible trade. I know, I know, I know. I had to go through it. I went through it. I learned a lot. I learned so much about myself during that time. I learned where I messed up, what I oversaw, my position size being bad and how that trade carried over to other trades and so on. And I'm like, wow, like, if I didn't take that trade, you know, maybe I would have made more for the year, maybe less, I don't know. But that trade has now engraved experience in me. And that experience is now going to carry over to this year and the year after and the year after and the year after. You know what I mean? And that's how you guys need to look at it now. If you guys want, I have a trading Instagram. Give it a follow. I post a lot of trade ideas. I post trading, you know, tips or helpful stuff for you guys. If you guys want, you guys can check that out. But yeah, that's that. And like I said before, for 2021, I want to, I want to produce a lot of content for this channel focusing on, on all types of traders from, from people starting out to people that have been trading and provide like real genuine, helpful advice. And you guys saw like that's why I posted my P and L yesterday. I didn't post my P and L to brag, but I posted my P and L profit to loss for the year to say, listen, I'm talking from experience. And since I'm talking from experience, I want to show you that hey, if I'm telling you X, Y and Z, I have something to back it up. I'm not just talking about X, Y and Z. I'm not just, I don't want to be just another YouTuber looking to get views and all that stuff. No, look, I'm talking from experience, you know what I mean? So with that being said, thank you once again for watching, guys. If you guys haven't subscribed, subscribe. And once again, if you guys can like this video, please give it a thumbs up and comment down below. What are your goals for 2021? Like if you have been trading, like what, what are some things as a trader you are, you are looking to accomplish and let me know down below. Guys, once again, thank you and I will see you guys on the next video.