Grinding it out, day after day

L

lescor

I’ve decided to keep a public trading journal for 2010. I really debated whether or not this is a good idea, but here’s why I decided to do it.

I’ve gradually gotten more complacent and somewhat lazy over the last couple years with my trading. I’ve been fortunate to have a couple really good years and haven’t had a strong impetus to put in long hours working on new ideas and refining current ones. I am somewhat concerned that 2010 and beyond could be tough sledding as the government meddles more and more in our business and the computers we compete with get harder to beat and get to play by different rules. If things do get tough and I’ve put my trading out there for all to see, maybe it will help motivate me to buckle down and stay ahead of the game. It will also force me to stay on top of my record keeping, which I really let slide last year.

There is a lot of negativity, disbelief, and cynicism about trading expressed on this site. I think most people who are well prepared and willing to work can make it as traders. Hopefully this year doesn’t suck and I can provide some encouragement to those working at it and prove the haters wrong.

My journal will be light on specifics of what or how I trade. A lot of what I do is liquidity sensitive and I do not want to invite people to try to reverse engineer my systems and then compete with me for fills. I am happy to engage in discussions about things like position sizing, risk management, handling emotions, etc, but don’t be offended if I don’t answer your question about “what time and price did you enter this stock and why did you exit”?

I’m only going to report weekly results. I’ve always treated daily p/l’s as noise and don’t pay attention to any time frame shorter than a week when it comes to tracking profits.

It’s hard to set a goal for the year as it depends so much on volatility. In my mind, I would be concerned if I wasn’t able to average at least $20,000/month. $40k/month is about what I’d consider average, not counting the crazy period of late 2008. Like I say though, I am prepared for this year to be tough, so I will be pleased to scratch out 250 to 300k. I’ll call that my goal for the year and hope I over shoot it.

Most of my trading is done in a prop account that is starting the year at $110,000. I also have a retail account with more than that in it, but most of that is reserved for taxes, living expenses , etc, and also to pay for a new house I’m building. The retail account sees trading daily, but usually light volume and dabbling in different things. It gets busy if volatility really jumps though. I don’t expect it to contribute more than 30% to my p/l total.
 
Surprisingly good first week. Net $23k on about 700,000 shrs traded.

I don't know if I'll post account statements every week, but I'll post the first week to get things established.

I'll get into some generic explanations of what I do later.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2695595>
 

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Lescor, without going into details, can you tell us a bit about your trading strategy? trend following, reversals, openings, RTM, etc...?

On another note, what are you going to change in your trading this year to face the challenges you mentioned in your initial post, ie growing computer competition and decreasing volatility?

Looking forward to reading your journal, good trading.
 
Hi Lescor,

Would you mind giving us a background about yourself and how became successful?

Also, without going into too much detail, could you please tell us what is your money management strategy?

Thanks! I am looking forward to reading more of your journal!

PA
 
Quote from Pension_Admin:

Hi Lescor,

Would you mind giving us a background about yourself and how became successful?


PA
More...

Pension_Admin is right. We are not interested in your trading details. We don't want to know the graphs, charts, opening balance or closing balance, etc.

We are interested in your personal stories, like when you started trading, how long it took u to be profitable, how much you made initially, landmark events in your trading career, etc.
 
Some background: I have been trading full time for 8 years. Prior to that I was a firefighter and had a strong interest in the markets for several years. I didn't know what I was doing but the market's siren song kept me coming back. I basically lost all my disposable income for about a 7 year period as I kept funding accounts that would end up at zero. Eventually I just got pissed off enough that I decided I had to buckle down and figure this game out or enter a 12 step rehab program :)
I started reading Gary B. Smith when he wrote for thestreet.com and his approach just seemed to click with me. He used very very basic TA to swing trade stocks and stressed things like position sizing, money management, expectancy, etc. It was like a light bulb went off because now I could see how trading could be boiled down to just pure numbers, and I really liked numbers and math. Prior to that I just followed hot tips, rumors and newsletter recommendations. But this new approach suddenly made sense of it all. I read every article he ever wrote and every book he recommended and took notes to reinforce it all. I cobbled together an actual trading plan, taught myself MS Excel to track it and crunch numbers and in a whole year of trading, I didn't lose any money! I didn't make anything, but I had a whole bunch of stats to review and a new understanding of how this game is played.

It was in my blood pretty deep then and I knew I had to make a go of it full time. So I quite my job with $40,000 to trade with and a year of living expenses set aside. I left my wife and kids behind and drove across the country to trade for 3 months in a prop office to try to speed up the learning curve. It took me about 4 months to stop losing money until I found something that clicked and it's worked out pretty good since.

As for how I trade, first of all I only trade stocks. I will dabble in futures and options, but they are just pot shot trades. I don't have an edge there so I never bet big. Almost all of what I do is mean reversion based. I have about half a dozen separate strategies, but two of them account for most of my profits. Most of them use some degree of automation.

The basis of all my trading is still shaped by those principals I learned almost 10 years ago. I stress capital preservation above all else and try to boil everything down to numbers and odds. It took a long time, but constantly focusing on that approach has made trading a fairly emotionless endeavor at this point.
 
Wow, this is a rarity here on ET. Thanks for sharing Lescor, really looking forward to following your journal.

Thanks, and have great year.
 
lescor i think whats happened to you and most black box traders
is the huge proliferation of the whole black box trading explosion.i've read a full 80% of vol is automated now.so in reality
many automated traders are fighting each other thus theres little edge now. of course when volatility and panic set in it opens the game up for wild swings.friday was a weird day as the overall mkt had little movement but there was big movement under the mkt with many stocks moving.no question the last 4-6 months have been tough
 
Dont mean to get into your personal life, but how did you manage to tell your wife and kids you were leaving for 4 months?... There was a place in miami fl called Wasserman capital, where they teach tape reading..a dead art now i guess with all the black boxes, but life has a way of keeping us stuck in one place. Now that I'm engaged, I cant really just get up and go somewhere.
 
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