October Nomad Income Report: Leveraging Failure

October Nomad Income

October Nomad Income: Life Update (Where the Money Went)

After a rough landing in September we took some much needed time to relax and enjoy the beach life I have has been missing since Thailand. (Sarah is still homesick for a fall season and a cooler climate). Our time in Europe was amazing–we met a few really great families who are also on the road with their mini-me’s, got our fill of delicious meats and cheeses, and did some sightseeing around Hungary, Croatia and Bosnia.

In Playa del Carmen, we decided to down shift a few gears and just enjoy our time with Spencer and experience the neighborhood we now call home. We rent a modern 2br in an inexpensive but central neighborhood. There are a lot of families nearby, which gives the neighborhood a very pleasant and homey vibe. On Sundays, there’s a great little street market behind our apartment building. Spencer is attending a local guarderia, learning Spanish and socializing with other kids his age (a challenge in Budapest & Zagreb). Every restaurant and food cart we’ve visited has been excellent and the people of Playa are incredibly warm and laid back…especially once they know you’re not just another tourist. On the weekend, we usually hit one of the local beaches, and go grocery shopping. Pretty simple.

As mentioned in our last nomad income report, I have decided to trade full-time. After three weeks of trading, I managed to net $1000 per week, but became overconfident and made larger, highly leveraged, trades in the last week of October. This resulted in a net loss on trading income for the month of October. Needless to say, that was a kick in the pants and I definitely questioned my decision to make this my full-time career.

As I’m writing this now in November, I can tell you that I haven’t given up and have proven to myself that trading is not only a viable career, but is also my passion. I love it on up days, and even on most of the down days. There is so much to learn and every week I get to experiment with those learnings.

October Nomad Income: Trading

$144 in realized losses for October. Having the same capital in the S&P 500 would have resulted in a $1,200 loss, so I beat the market this month. Yay! …sort of.

As mentioned above, I had found a trading system that works well for me. It netted about $3200 in 3 weeks. My pattern day trading restriction was removed from my account and I thought it would be a good idea to leverage up my trades (higher risk/return) with this newfound freedom. I mean it was working well with smaller lots, right?

Note: Pattern day trading is a Securities and Exchange Commission regulation that limits the amount of turnover one can have on their account in a given period. When that limit is hit, the broker will often restrict the account to avoid it from happening for the next 3 months.

Well, it turns out higher risk/return was a bad idea. I managed to lose around $5800 in four days. Though I made back $2500 in the last day, I netted a -$144 loss.

I’ve learned so much over the last year of trading, especially about the technicals of trading – things like charting, position sizing, advanced trading patterns, fibonacci levels and momentum fans. These are all extremely helpful, but the biggest challenge to trading is the psychological aspect of it. A $600 drawdown (total loss on a trade) affects me differently than a $2100 drawdown does. My decision making skills are clouded, I become irrational, I start to over-trade, I stop analyzing and want to “make it back.”

I’ve found that the key is not higher leverage, but gradually tempering my tolerance to drawdowns. I can go higher leverage, but only to the point at which I’m not glued to my screen, skipping sleep and developing deep vein thrombosis. If I can make educated trades and manage risk with $600 drawdowns, then maybe I leverage up with risk of losing $800 in the trade, make 5-6 great trades at that new risk level and then bump it up to $1000.

What I’ve learned most from trading is to manage my emotions, particularly fear. Doing so allows me to effectively apply the cool stuff I’m learning each day. November will be a better month. 🙂

October Nomad Income: Miscellaneous Income

Blogging:  $0 – Clicking the “Shop on Amazon” link at the bottom of any of our pages before you shop on Amazon will give us a small commission. *long, obvious wink*

BigStock: $0 – Those seven stock images are still going strong. Haha 🙂

Writing: $0 – Sarah was published in Masters Review and Trigger Warnings. While neither of these were paid, Sarah’s building her portfolio of work. (both of these have low acceptance rates)

October Nomad Income: -$144

October Nomad Expenditures

Accommodations: $684 (This covers a full month in our modern 2br apartment.)
Transportation: $9 (petrol for the motorbike. Yup, about $2.50 a week!)
Cigarettes: $70 (I’m still smoking..yup)
Child Care: $138 (We love Spencer’s guarderia! The ladies who work there are wonderful and friendly, and tell us about his day every day. This covers 5 days a week from 7:30-3:30pm)
Charity: $80 (Blankets for a Syrian refugee family of four in Los Angeles.)
College Debt Repayment: $100 (Sarah has one small college loan left to repay in installments.)
Entertainment: $20 (Movies)
Groceries: $333 (This is a cheap location for groceries and fresh produce, but we tend to eat out more here. The food is excellent in Playa, regardless of cuisine!)
Health & Beauty: $125 (This covers a few massages for Sarah and me.)
Restaurants: $723 (We continue to work at cafes, but are also eating out more in Mexico.)
Supplies: $132 (I managed to crack my iPhone screen and snap the key to my motorbike, so this covers a screen replacement and new key.)
Utilities: $42 (We pay electricity and water at our apartment, also purchase airtime for our mobile phones.)
Vacation: $0 (Nothing special this month. We have a beach three blocks away!)

Nomad Expenses: $2,454

Net Savings: -$2,598

* So, definitely an expense report this month. We had sales on Nomadica and Amazon, which pads this a bit. Including our business income, we’re are still in the red for the month of October.

If our October Nomad Income report was your first layover with us, you may want to check out our other Income Reports.

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