Ok so it's begun. Well actually it began many moons ago, this pursuit of mine (trading). But what I'm really referring to as beginning is my effort to loosely log my trades and any other thoughts that come to mind. Admittedly, my motives for publicizing this in the form of a blog are self-serving, for I'm hoping for this to lead to greater performance and ultimately a runaway account by being accountable for my investment decisions in a semi-public way. The idea is for me to be coerced into making more disciplined decisions (resulting in more consistent returns) by being accountable to this blog. There is no way for me to prove the veracity of my trades, nor do I care to at this point, for I'm essentially doing this for me. Some people keep journals; this one just runs the risk of critique should people start to follow my journey. I have no idea of how many others out there publish similar blogs. Trading can be a rather desolate and lonely journey, so perhaps this is another way of reaching out or keeping myself in check. Believe me, an unchecked trader can quickly run his/her account to $0. Been there, done that. And I don't wish to repeat that experience (actually those experiences).
I will point out one caveat to not proving my trades. Should my account experience significant growth, I will probably have to reveal official statements (or get it audited somehow). For now, everything's uncertain as to how I will do, how I will choose to log trades, or how dedicated I will be to this effort. But if I am successful, perhaps I can refer to this blog as my official seed that eventually turned into a tree. Too many people in this business refer to things in hindsight and selectively choose success stories. Being the type of person who doesn't like to hide behind titles or resume-like "track records" (where you can choose to paint a picture any way you like), I instead choose to place a bet on myself now and prove to myself (and others if they choose to follow) that I can see this thing through.
By the way, the reason I seem to treat success as black or white is that in trading, a positive or negative edge can go a long way in the long run. You will probably end up broke with a negative edge (inferior trade selections, bad trading habits, or a combination of the two), and may be wildly successful with even modest consistent returns.
Week 1:
Nov 16-20, 2009
$6250 -> $6040 (-3.4%)
Account experienced way too much variability this week. Bought 100 TXN $26 PUTS for $0.61 on Monday, rode it down to .29 at one point and finally bailed at $0.55. In other words I was down 50% at one point intra-week! This turned out to be a great call (but you can't beat yourself up too much) as TXN was downgraded by Bank of America, causing the puts to reach $1.5 on Thursday (i.e. my acct value would have ballooned to $15,000). Made up for this later in the week by buying some BIDU puts, resulting in a more modest loss. Was up to about $7400 on Friday with some Google 570 calls, but didn't sell and time value decay killed me. As you can tell, the net loss of ~$200 masks the true nature of this trader's trek. I need to reduce downside risk to prevent these kinds of roller coaster rides by being more patient for the right conditions to take place, or simply reducing my position size with similar trades.
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