Journal of Poor Recent College Grad

I wanted to post my paper account as well and illicit some feedback.

Beginning Balance: 100K
Started: 8/05


Take a look and then read the rest of this post:


DNA - Looking to close this position soon, not comfortable with DNA's prospects of closing between 90-95.

MRK & ECA - Covered writes, something I would hold for a long term. MRK pays out 5%+ divy so don't mind waiting and keep writing next month calls.

NKE - Looking to exit

ELN & MO - I'm really attached to these two, its dangerous but I will wait for these to expire

KFT - will wait to see what happens with the stock but not looking good.

Love to hear some comments!
 

Attachments

Micron to Hire 860 in Manassas

By Bill Brubaker
Washington Post Staff Writer
Saturday, November 5, 2005; Page D01

Micron Technology Inc., one of the world's largest memory chipmakers, is creating 860 high-tech jobs as part of a $1.2 billion upgrade of its manufacturing plant in Manassas, the company announced yesterday in a news conference with Virginia Gov. Mark R. Warner (D).

The new employees will help the Idaho-based firm produce larger memory chips at the plant, which employs about 1,100 people

http://www.washingtonpost.com/wp-dy...110401428.html?nav=rss_business/localbusiness
 
Forget about doing the diversify bs. You need to learn a specific area of the trading world really well first.

Why the lure of options?

The bang of the buck and the new boy on the block is to trade the E-MINI futures, i think options are for ladies...:eek:

Joking aside, just look at the volume of the SP500 in the pit and the volume of the ES on Globex, that tells you where the action is.

You can swing trade ES, but as a discipline and to speed up the learning curve try this: Pick a trade a day in the ES, do it with a stop every day. Never carry it overnight (you are in school again, remember? Many that come into trading think just because they were good at other things that trading will be a snap...WRONG) At end of the day review the trade, win or lose, see what your trading ideas look like in print, very revealing....:cool:

Be critical and hard on yourself, because the market surely will be. Learn a trade a week, then bingo in a few (months, op's years ) the world will be your oyster. Are you up to the task?...

O, one more small item, Forex is not a good learning instrument. For one thing the "PRIMARY" markets of forex are overseas because you are trading the dollar "AGAINST" the foreign currency. You will need your sleep to become a good trader, forget the forex ...Do not be disappointed, it gets harder....:)
 
Your dead on about FOREX, unless you want to sit in front of the screen and watch your trade tick by tick, its just too volatile for me.

To be honest, I know little about the emini's. I hear there is greater liquidity and hence less opportunity for manipulation. But I guess it boils down to the underlying security, how well do you know it. When you purchase a straight stock, you are betting on one direction. Only options is to exit the position or add to it (average up/down). I like the fact that you can do a little more with the options (roll forward, down, up, etc.)

I'll take a look into emini's though.
 
1st Observation:

In paper trading you want to try and replicate exactly what you would do in the real market with real money.

If you are not going to start in the real market with 100k you shouldn't start paper trading with 100k.

The point is to try and replicate your strategy precisely the same as in the real market and establish that you can make money consistently before making real money.
 
Quote from knocks420:

I'm going to start a journal to track my trades, mostly for myself, but hopefully there are others that are in a similar situation or in a position to help. Here goes:

Bio:
25, male, Boston (moving to D.C. [Boston is weak])
Hometown: Fairfield County, CT
College: Johns Hopkins
Occupation: Project Engineer for manufacturing company (recently quit to pursue trading, either via MBA or prop shop. Let me know if you've done something like this, I would love to talk about it.)

Broker:
Ameritrade ($5K yep, completely undercapitalized) Added additional $3K later.
Oanda ($2K)

Current Balance:
Ameritrade ($4.9K)
Oanda ($850)

Net:
Ameritrade -$3.1K
Oanda -$1.1K
(Stellar! Duration is 9 months trading)

Now to the trades:
Currency markets has been an oscillating decline to $850. Made some extremely stupid trades for large losses. Has now taken a back seat to equity trades.

IMDS - Penny stock a got a tip from a co-worker. This guy made bank in '00 on this stock, bought a huge boat with the proceeds. I saw dollarsigns and went all in with the $5K at around .50. Sold at .19. Big time loss.

ACR - Read Darvas book and ran Yahoo stock screener. Bought at $14, sold at $14. Two weeks later was trading at $18. Sold too early.

ELN aug. 7.50 calls- +$500 on a short term news announcement.

ELN oct. 10 calls - -$750. Expired worthless waiting for the stupid FDA.

Current Portfolio:
ELN (100 shares @ $8)
ELN Jan 08 Calls (1)
MO Jan 07 Call (2)
Cash ($1.5K)

Yep, totally undiversified. But not enough cash to diversify properly. No specific strategy, mix of fundamentals and technicals. Looking at the following stocks: NKE, SIRI, AGIX, AMHC
I really like options and would like to swing trade long term, near the money options. Also trade OTM options if I get wind of announcements/earnings. Probably missing some vital info but thats about it for now.

BTW, I got a paper account on optionsxpress. Started $100K in Aug., up $15K right now by selling some puts on MO, KFT, ELN, Covered calls on MRK, ECA, Combo on DNA. The puts are the most profitable.
More...

2nd Observation: Lack of diversification is never a problem. I have never had more than 4 option positions on at one time and did very well trading this way.

3rd Observation: Having no specific strategy IS a problem. Forget trading until you have a specific strategy. Try to develop a niche for yourself and trade that niche. Mixing currency markets with equity markets is probably not a great idea. Mixing a conservative strategy like covered call writing with directional option plays and trading on tips and trading on news tells me you are confused and don't really know what you're doing. You need to decide what sort of trader you are.

4th Observation: NEVER trade on tips alone. Do your own analysis and only take the trade if your independent analysis supports the view. Any idiot can make lots of money on 1 stock call like one roll of the dice at Vegas.

5th Observation: NEVER trade on the basis of news alone. Always look for technical confirmation as well.
 
Quote from knocks420:

I'm going to start a journal to track my trades, mostly for myself, but hopefully there are others that are in a similar situation or in a position to help. Here goes:

Bio:
25, male, Boston (moving to D.C. [Boston is weak])
Hometown: Fairfield County, CT
College: Johns Hopkins
Occupation: Project Engineer for manufacturing company (recently quit to pursue trading, either via MBA or prop shop. Let me know if you've done something like this, I would love to talk about it.)
More...
Please don't quit your job for trading until you have generated profits in excess of $250,000!
 
Multioption,

Unfortunately my last day at work is this Friday. I plan to continue trading this $5K account. I'm not going to jump into trading full time. My likely course of action is to complete my GMAT's, apply to full time schools, see where I get in.

I've been having some discussions with people regarding prop. I was curious if there are prop shops that cater to the swing/position trader and or options traders? It seems most are intraday/scalp type shops. Any ideas? If there are, I would seriously consider those shops along with grad school.
 
Hello knocks,

I just discovered this thread. Right now, I'm in a similar situation. Same age, university student , with nearly the same capital. Have been trading for about 7 years end of day, and fulltime, intraday since this summer. However, I have decided to quit, because with such a small acc. size, I feel that it is just a waste of time and money.
After sitting in front of the screen for 5 months day in and day out , I'm slightly below break even. Even if I were more profitable and would be making 10% per month e.g., I do not see a way of making a living through trading, at least not with ~6000 USD ;-) Serious money management is imho not possible and that is a major problem, right after not having a good strategy ;-) I might give it a try again when I have more than USD 50.000:D

I don't want to discourage you, just wanted to point out that starting out from zero is too hard. You will be forced to quit after only few losses and then what ? It really surprises me how affluent some people on ET seem to be, some can burn a 50k account without having to worry about anything...I guess trading only make sense once you already have a lot of money.
 
I think undercapitilization is rated as the number #1 reason for failure when it comes to trading (maybe I just saw that on ET) Daytrading is tough, I liken being successfull in daytrading to becoming a big time movie star. Many try, few succeed.

I've expanded my time horizon in the $5K account into mostly long term investing. I own LEAPS (one to two years) and I'm hoping for a news catalyst for each of the underlying securities within a 6 month time frame:

MSFT: Xbox & Vista release
MO: Pending litigation announcements
ELN: tysabari reapproval.

If nothing happens within six months, I can either roll forward if I still like the story or I can close out. Also these longer term LEAPS don't decay as rapidly as regular options. You can say I'm investing rather then trading right now. The Options allow me leverage to make greater returns. Rather then buy like 20 shares of a stock, I can control 200.

I can't say with any certainity what will happen. I hope within a year or two to slowly build up my account and then I can trade shorter and shorter time frames, allowing for more risk.

If I can make a suggestion, stick that ~6K into some good long term plays till you build up that $50K. I assume some of these guys pulling in $250+ a year are smart enough to take a share and put it into money markets, bonds, divy stocks, etc.

This is a long post (just waiting for no one to look so I can sneak out of work!) another idea I've been kicking around is to get some education in entrepreneurship and purchase established businesses or real estate to build some streams of income. That way I can trade full-time and still have cashflow. I'll have to figure out financing (Someone wants to give you money, its just how much interest are you willing to pay...) . I'm 25 and dreaming right now.
 
You must log in or register to reply here.
Back
Top