nycderivtrader journal

Yeah, 1 mil is a lot, but it is what i am running on my "virtual fund" at marketocracy.

Like I said before, they charge .05 a share each way, plus sec fee, so this is not an ideal way to day trade, and this is not what I am expecting to use it for.

I think that my success has been from coincidence, so I will not trade like I have in the past two days. I am going to focus more on a weekly hold strategy, possibly longer- with a gain of 5-10% target on each security and a loss stop (I have to manually enter when the price comes down, unfortuantely) of 5%.

My investment strategy/focus is on investing in stocks (unfortunately I can not trade options on my fund OR short sell) that have been experiencing downward movement or a massive hit due to news. I have related to this, after reading in Market Wizards about one of the successful traders utilizing this strategy. I believe that this fits my personality, and by trying to weed out as many screw ups as possible, get a better start when I build up my small portfolio to aninvestment level (I just graduated from college this May).

*****I am trying to earn at least 5% compounded a month, with a goal of 10%. How does this compare to all you PRO traders out there? This will be very hard for me, but for many of you is this a reasonable sum?*******

Regards
nyctd
 
Quote from nycderivtrader:

Yeah, 1 mil is a lot, but it is what i am running on my "virtual fund" at marketocracy.

Like I said before, they charge .05 a share each way, plus sec fee, so this is not an ideal way to day trade, and this is not what I am expecting to use it for.

I think that my success has been from coincidence, so I will not trade like I have in the past two days. I am going to focus more on a weekly hold strategy, possibly longer- with a gain of 5-10% target on each security and a loss stop (I have to manually enter when the price comes down, unfortuantely) of 5%.

My investment strategy/focus is on investing in stocks (unfortunately I can not trade options on my fund OR short sell) that have been experiencing downward movement or a massive hit due to news. I have related to this, after reading in Market Wizards about one of the successful traders utilizing this strategy. I believe that this fits my personality, and by trying to weed out as many screw ups as possible, get a better start when I build up my small portfolio to aninvestment level (I just graduated from college this May).

*****I am trying to earn at least 5% compounded a month, with a goal of 10%. How does this compare to all you PRO traders out there? This will be very hard for me, but for many of you is this a reasonable sum?*******

Regards
nyctd
More...

Instead of wasting your time with a $1 mil fund... you should be researching and studying an investment or trading method. Pissing around $1mil in some virtual fund by the seat of your pants is not even close to real professional trading.

Take $5,000 and open an account with IB and start swing/position trading with 100 share lots or smaller depending on risk. Have a plan or strategy that u can write on paper and follow it until either you make a fortune or screw up. If screw up then try again with another plan.. keep doing this until you reach your goals.

Trying to reach %5 compounded a month or any type of % a month.. is not realistic. It all is really about having a sound strategy that statisitcally makes sense and has an edge.. and good old fashioned luck. Professional traders dont set exact goals how much they should be making every month.. because its not realistic. You have to understand that if you have a positive edge of being right %50 of the time on a 1:2 risk to reward... you probably will not be making money every single week or even month... or have some type of set % in mind.. but at the end of the year... you will be ahead.

If you really want to understand what trading is all about.. learn how casinos operate... and open a small account and trade real $. With a $1mil paper fund you are missing the most important parts of trading which are... emotional control, balance, and execution. With a virtual fund you have absolutely none of that. You have to see how it feels when you wake up in the morning and find out your position is down %10 in the afterhours or worse... and you are down $500+ at the open. Or even worse shorting a stock.. only to see it pop %25 the next day because it was bought out. Learning how to survive those types of situations and still be profitable and the end is what professional trading is about.. and it will never be realized in virtual land.


--MIKE


 
Your posts are well thought out, but I would have to agree with the CRITICAL INPUT already stated. Take your trading plan/idea, open an account and scale down the share size.

IF you are risking 1M - your are risking 100% and more of that account (I would presume) holding overnight.

IF you were trader AIMED to be around in a few years, you would be risking .05 - 2.5% of your entire account on any 1 position, so that means you need to have a TON of cash in your account to trade.

AND if that is the case, why trade? Why not be an investor. Take your BOAT LOAD OF CASH and get a diversified bond, or yield investment portfolio.

On the positive side, your posts have structure and are well articulated and planned. That is a start to becoming a CONSISTENT trader.

Keep the spirit up and the work going, but focus on the real - not theoretical. Good luck!!

PQ
 
DOW 9,348.80
NAZ 1,765.31
S&P 993.05

Yesterday's Holdings:
JNJ 10,100

Value: $1,107,737.25
Cash: $608,797.25
Stock Value: $498,940.00


Now holding:
JNJ 10,100 shares


Value: $1,109,101.65
Cash: $608,747.65
Stock Value: $500,354.00

Change for day: +.13% = +$1,374
10% Goal per month, by 9/15/03 1.2M, requires 8.2% return from here.

Today's trades:
I didn't enter or exit my trade today. This weekend I am going to try to research some smaller cap stocks, circa 200M-1B that I can add to my portfolio in smaller amounts. I think that no matter which way the market moves (I still expect down, especially next week), smaller cap companies will provide the best and most consistent returns.

As I have noted before, I am looking for companies that have been beaten down in recent times for whatever reason- and need to identify why they will be increasing before investing.

I still am seeking 5% returns a month, with a goal of 10%.


nycdt
 
Trend fader,

I think there is nothing wrong with trying to set a goal of 5% per month and trying everything to achieve it. Having a goal to achieve will help push you if you are not yet near the goal.

I think that the reason we see such a low success (over longer terms) in trading is because is not a viable way of investing. I screwed around the other day trading, but in my opinion I happened to be fortunate not to lose money.

You may be able to statistically guess which way the stock is ready to move (and have a resonable stop loss/profit points), but in the end it seems that everyone has a change of "LUCK." Just because you hold to your strategy doesn't mean that in the end you will profit (or enough that you need to).

I still would like to hear why people are so involved with TA and trading like this. I would love to have a sit down some day and try and figure out why there is such a belief that their strategy will yield profitable results consistently.

nycdt
 
I want to ask you one question... what is the point of buying 10k shares of JNJ?

No pro trader or money manager in their right mind would put half there account into one stock overnight.. regardless of anything! There is absolutely no excuse that you can give me that justifies this.

The reason you did this is because its only play money.. and it doesnt really mean anything. Thats why I think the whole thing is futile.

If you actually had $1mil would you really put half of it in JNJ.. Of course not.. so why bother bullshiting around?

Even if you are right and JNJ does go up and you make yourself %5 on the account for the month... would you actually consider that real life like performace and something you deserve credit for? If so then you are cheating yourself.


Anyways,
good luck..



--MIKE
 
Yes, 50% of one security in the portfolio is pure stupidity. I have been fortunate lately in not losing money in my large holdings. I am doing research now on stocks to add in order to diversify.

However, I believe that once I get about 10 securities in my fund, one will be my major holding, with 20-30% invested. I feel that investing this in a stock that I have great belief in going up will help provide me with returns that aren't market tranquilized.

I know the importance of diversification (my portfolio right now is FAR FAR FAR from this, I know), but when you get to a certain point of diversification, you are really killing yourself in getting closer and closer to the market movements.

But, to inform you of my childlike stupidity (and the validity of my 1 holding), I have had the same two stocks for the past two years- only those two. I just graduated, so I did not have too much money (70% of my worth in these two stocks), and I am up 300% for the year to date- and i sold them off. Now I am looking to the options markets to try to capture my negative outlook on the markets though entering into long puts. I'll be looking to make few IMPORTANT investments in the future. I feel that with enough research, my odds will be good enough that I can take the market risk and count on my few holdings.

Yes, I know you will say it is stupid, but I have been successful as of now- IN REAL LIFE.

nycdt
 
DOW 9317.60 -31.20 (-0.33%)
NAZ 1764.31 -1.01 (-0.06%)
S&P 993.71 +0.65 (+0.07%)


Yesterday's Holdings:
JNJ 10,100 shares


Value: $1,109,101.65
Cash: $608,747.65
Stock Value: $500,354.00


Today's trades:
Shares AVG Cost Total Cost
Buy JAKK 12,800 $11.5271 $147,547.00
Buy CCRT 6,900 $14.8072 $102,169.94
Buy CXW 4,500 $22.3055 $100,374.60
Sell SOHU 6,400 $29.3849 $188,063.14
Sell HD 9,700 $32.3889 $314,171.91
Buy CPRT 10,800 $9.3529 $101,010.86
Buy JJZ 8,400 $5.8413 $49,066.80
Buy SGMS 5,600 $8.8719 $49,682.88
Buy AZR 2,800 $17.3969 $48,711.40
Sell JNJ 5,000 $49.6577 $248,288.36



Now holding:
CPRT 10,800
CCRT 6,900
CXW 4,500
JNJ 5,100
JJZ 8,400
JAKK 12,800
AZR 2,800
SGMS 5,600


Value: $1,110,191.33
Cash: $258,340.33
Stock Value: $851,851.00



Change for day: +.11% = +$1,089.68 10% Goal per month, by 9/15/03 1.2M, requires 8.0% return from here.

Today's trades:
I entered into some companies to help spread out the risk and get to a style that I would/will actually use outside of my virtual fund. I am investing in companies across the board that have low p/b p/e and high cash balances. Once they have satisfied these criteria, I look at sales to make sure that they are relatively stable and that I believe that I can obtain reasonable reward for the risk. Some of these companies have been beat down due to poor one time sales problems-- etc.

I am going to keep a cautious eye out on the two casino/gambling stocks that I have- I feel that they may have some potential weakness in them.

I am going to keep running my stock search and reevaluate my picks with new ones. I am looking anywhere from 5-50% returns on each of these investments with a stop at 10%.


nycdt
 
"I would love to have a sit down some day and try and figure out why there is such a belief that their strategy will yield profitable results consistently."

Why figure it out, why have a belief. What does your trade log, stats (EXCEL SHEET) show? Is it a positive expectancy (with trading costs figured in) GREEN, or a negative expectancy RED. Daily, weekly, yearly etc.

It is that simple, so why question a belief .... the numbers speak for themselves....be it a TA approach, a fundamental approach or whatever. IT is not the method, or style that makes a successful trader, it is the individual (trader).

Does that make sense?
pq
 
So far, from what I have seen with your posts (DUE TO THE SIZE YOU ARE TRADING) AN important thing to be considering is POSITION SIZING and MONEY MANAGEMENT.

What is your position sizing method?

Thanks
PQ
 
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