Friday Feature: The Myth of Being a Trader (Part 2): You must love big risks and all the excitement
April 18, 2019
[…] On Feb. 5th, 2018, the myth of high risk/high return was shattered forever as a new truth about investing emerged to take hold.
Pearl Li —
On Feb 5th, 2018, the market had a flash crash and for the first time in my trading experience, I have successfully modified my portfolio to a “No Risk” position.
Yes, for the first time my risk graph had zero risk. This means, the market could go down to zero and I would still make a profit. I have no cost basis to lose, only gains regardless of how the market moves. I knew at that moment, a different financial future would emerge to become my reality when I can hedge away ALL of my risks. The crash became my catalyst for Why I Left My 200K Job for Financial Freedom.
That day, I ran to my best friend to show her my risk graph so she could see it for herself. The risk-free trade has been shown to me by the coaches at Tackle Trading and it was a hallmark trading style from Coach Noah Davidson. It changed my fundamental assumption about life and wealth. I wanted the whole world to see my risk graph on that day because I’ve proved that the assumption of “High risk, high return” is wrong! Although I knew about this trading style from learning, when it actually happened in real time, it was life-changing.
I knew from that day forward: no job or promotion can ever match the certainty of a no-risk trade. I laughed that day releasing my previous assumption about risk, and I cried that same day in the bathroom of my office because I felt so enslaved to not be able to do what I want to do while still stuck at this job at Amazon.
Some people still think to this day that I took a big risk to leave my job, but if you understand the world of “Low Risk, High Return”, you’ll see it very differently.
Successful traders/investors of every asset class live in the “Low Risk, High Return” world. What gets me excited is preferably “No risk, high return” realities.
This was once taught to me like a mythical tale, but when you have learned enough, it will just appear in plain sight. Perhaps then, you will be able to experience your own breakthrough about the myth of “High Risk, High Return”.
Pearl Li. The Theta Finder. In the Making.
Pearl Li previously has been a product management professional for more than 10 years working at well-known companies such as Amazon and Nielsen Company. She took the leap in 2016 with Elite Legacy Education to learn about building long term wealth through financial market trading/investing. In 2018, Pearl happily left her job to pursue investing/trading fulltime producing theta style trading that generates monthly cashflow. She is thrilled to be a voice on the Tackle Trading platform to share her transformation as she goes through various phases of her growing experience.
Financial freedom is a journey
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Excellent writing and concepts that excite me most. And, obviously you ARE very smart, but the blog about not needing to be so smart was very appealing. I keep wondering, could one have a portfolio composed of only no/low risk theta strategies?
Its an adjustment strategy. I did it when the volatility was very high, so in that market condition, this “no risk” position was possible. But when the volatility is not high enough, this adjustment style can still hedge a good portion of your risk, but not completely. So, it really depend what the market is willing to do for you.